Vancouver, BC: A proposed national class action has been filed in the British Columbia Supreme Court against Visa, MasterCard, and several leading banks. The claim alleges that the credit card giants and banks have engaged in multi-billion dollar price fixing conspiracies to increase or maintain the fees paid by merchants on every credit card transaction.
When a customer pays with a credit card, Visa and MasterCard take a percentage fee, along with the card-issuing bank and the company that processes the payment. That percentage varies depending on what kind of card is used. Basic cards charge a smaller percentage, while premium credit cards that offer points and other rewards cost merchants a much higher fee.
The claim alleges that Visa and MasterCard rules force merchants to accept every Visa or MasterCard credit card, even if those cards carry high fees for the merchant. The claim also alleges that these rules prevent merchants from charging more for payments with premium cards.
The suit follows a filing by the Competition Bureau of Canada, which seeks to prevent Visa and MasterCard from imposing the rules preventing surcharges and forcing merchants to honour all cards. This proposed class action seeks to recover the fees that Visa, MasterCard, and the banks are alleged to have collected illegally from merchants.
Along with Visa and MasterCard, the suit names BMO Financial Group, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Desjardins, National Bank of Canada, Royal Bank of Canada, Toronto-Dominion Bank, Bank of America, Capital One, and Citygroup Inc. as defendants.