Mastercard paying out millions in compensation to customers after landmark legal battle
MASTERCARD is set to pay out £200million in compensation to 47million customers after a landmark legal battle.
Customers will be entitled to a compensation payout worth up to £70 each.
It's understood anyone with a Mastercard - or who bought from a business which accepted the card - will be able to claim. We explain more below.
The move comes after a long running case which was put forward almost a decade ago.
Walter Merricks, a former financial ombudsman, first launched the legal claim in 2016.
He alleged that 46million shoppers in Britain were ripped off after fees were wrongly levied on transactions made over a 15-year period between 1992 and 2008.
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These fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves.
But Mr Merricks claimed shoppers had lost out as retailers passed on these fees in the form of higher prices.
The lawsuit was a first of its kind in the UK, often referred to as a "class action", after new rules were brought in under the UK's Consumer Rights Act 2015.
This is because it allows courts to treat similar claims as one rather than having hundreds or even thousands of separate individual cases. These types of cases are more common in the US.
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It makes it one of the largest settlement of a group litigation for the benefit of UK consumers.
Despite the multi-million payout, the figure remains lower than the £10billion to £15billon that Merricks claimed shoppers were originally owed.
Commenting today, Walter said he started this case because he believed that Mastercard’s fees paid by retailers for processing card transactions had been "unlawfully high".
He went on to add that "virtually all UK consumers had lost out for long by periods paying higher prices than they should have done as retailers passed on those costs".
He added: "As the evidence came to be known through the litigation process, this was the position only in a relatively small proportion of transactions and the settlement reflects that."
"The settlement that has today been finally approved represents a fair and just outcome for UK consumers."
Will I get a payout from Mastercard?
You are expected to be part of the claim automatically if all of the following apply, unless you previously opted out:
- You lived in England, Wales or Northern Ireland for at least three months between June 20, 1997 and June 21, 2010, or
- You lived in Scotland for at least three months between May 22, 1992 and June 21, 2010
- You bought something with a Mastercard credit card pr bought anything from a UK business that accepted Mastercard credit cards between the dates above
- You were older than 18 and living in the UK on September 6, 2016
Mastercard are expected to pay the money within 28 days but anyone eligible will have until the end of 2025 to claim.
A link to fill in a form will be available soon for anyone eligible to log a claim.
It's unclear how the process will work as it is the first time it has happened in the UK.
We have approached Mastercard for a comment.
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How much will you get?
A statement from Mr Merrick said that as the judgement ring fences £100million, so if 2.5million people were to come forward then they would each receive £45.
If fewer people come forward then it will be capped at £70 per head.
MERRICKS VS MASTERCARD
2015
New rules under the UK's Consumer Rights Act 2015 mean collective claims can be made.
2016
Mr Merricks starts a lawsuit claiming that Mastercard overcharged shoppers.
2017
Mr Merricks claim was dismissed by the Competition Appeal Tribunal (CAT), as was an application to appeal the decision.
2018
The Court of Appeal ruled that Mr Merricks be allowed to appeal the CAT decision.
2019
Mr Merricks' appeal was heard by the Court of Appeal and the decision was upheld.
Mastercard was then given permission to appeal that decision by the Supreme Court.
2020
After hearing the appeal, the Supreme Court dismissed it and ruled the case could go ahead.
2021
After hearing the case, the CAT ruled in Mr Merricks favour.
2022
Mastercard's final challenge was dismissed in the Court of Appeal.
Late 2024
Mastercard and Merricks reach a proposed settlement.
2025
The Competition Appeal Tribunal is due to hear the settlement on February 19.
Spring 2025
The Competition Appeal Tribunal gave its final approval to the £200million settlement in the long running class action against Mastercard.