Law firm Collyer Bristow is collaborating with Augusta, a leading litigation funder in the SME market, to back a multi-million pound claim against MasterCard and Visa over their use of multilateral interchange fees (MIFs).
Augusta guarantees to pay 65% of the damages award to claimants who in turn do not have to pay any costs towards funding the litigation.
Collyer Bristow and Augusta are targeting retailers that have a minimum turnover of £80 million in the action based on a ruling by the European Commission against MasterCard that found MIFs harmed
competition between merchants' banks and inflated merchants' costs for accepting payment cards*.
In July 2016, the Competition Appeal Tribunal (CAT) awarded Sainsbury’s £68.6 million in damages over the claim. The award paves the way for retailers, small and large, to launch their own legal claims for compensation which could mean the reimbursement of the majority of merchants’ fees paid in Visa and MasterCard and Maestro/Cirrus (now part of MasterCard) from 2011 to 2015.
Collyer Bristow estimates that a retailer with a turnover of £100 million could have a claim for a minimum of £500,000.
Stephen Critchley, Head of Competition Law at Collyer Bristow: “Thousands of retailers are impacted by this, and those who wish to make a claim should do so as soon as possible, given claims can only go back six years.”
Robert Hanna, Managing Director of Augusta: “We are very pleased to be working with Stephen and his team at Collyer Bristow. We believe that many, many retailers are affected and could claim compensation. Unlike other schemes, ours guarantees the percentage that successful claimants will receive.”
Telephone: (0)20 7638 9571
Caroline Merrell/ Georgia Colkin/ Lizzy Kittle
*Multilateral Interchange Fees (MIFs) are charged by the cardholder’s bank (the “Issuing Bank”) to the merchant’s bank (the “ Acquiring Bank”). For example, if the cardholder makes a purchase for £100, the Issuing Bank debits £100 from the card and pays, say, £98 to the Acquiring Bank; the other £2 being the MIF. The Acquiring Bank retains, say, a further £1 and deposits £97 with the merchant. The merchant fee is technically £3, of which £2 is needed to satisfy the MIF. These are simplified figures, for illustration purposes only.