In the UK Between 1992 and 2008? MasterCard Might Soon Owe You Money

By Holly Brockwell on at

It looks like a multi-billion-pound class action lawsuit against MasterCard in the UK is going ahead, and if it succeeds, pretty much all of us could be in for a payout.

The case was originally blocked by the Competition Appeal Tribunal (CAT) in 2017, but this week, the court of appeal ordered the CAT to reconsider its decision. The class action hinged on the argument that MasterCard's apparently excessive fees caused shops to pass on costs to consumers, meaning that prices were higher for everyone – whether you had a MasterCard or not.

That last point means that if the CAT allows the action to go ahead, every adult who was in the UK between 1992 and 2008 could get a payout of up to £300 to make up for the higher prices we paid in shops, even if you've never had a MasterCard. All you'd need to do is prove you were in the country during those 16 years.

The £14bn case has become the biggest class action in British legal history, led by former financial ombudsman Walter Merricks.

Merricks tells the Guardian:

"I am very pleased with today’s decision. It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period.

When challenged, all they have done is to raise technical legal arguments that turn out to have no merit – as the court of appeal has shown today. It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe."

Unsurprisingly, MasterCard had a somewhat different view:

"This decision is not a final ruling and the proposed claim is not approved to move forward, rather the court has simply said a re-hearing on certain issues should happen.

Mastercard continues to disagree fundamentally with the basis of the claim and we believe UK consumers receive real value from the security, convenience and consumer protection of our payment services."

One of the reasons the CAT originally denied the claim was that it didn't believe the evidence clearly showed fees were passed on to consumers, and was unsure how compensation could be calculated. However, the court of appeal says that's not a reason to reject the claim, and wants it to take another look.

If the action is successful, 46 million people in the UK could be included in the payout, since it's one of the first cases where participants are considered opted-in by default, and would have to opt out of the payment if they didn't want to be included. We can't imagine many people will be doing that.

We'll be keeping an eye on this case, but we've already mentally spent the £300 on Lego, so fingers crossed it comes to fruition. [The Guardian]

Main image: Håkan Dahlström via Flickr CC