What is being billed as the largest antitrust settlement ever at $7.25 Billion, The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation settlement received preliminary court approval back in November 2012. All merchants in the class action suit were notified that they had until May 28th to opt out. With this deadline behind us and only about 7,000 merchants out of more than 7 million merchant class members formally opting out, final court approval is exceedingly likely.
Many of the merchants that did opt out were very large merchants like Amazon.com, 7-Eleven, CVS Pharmacy Inc., Target Corp., Macy’s Inc. and Wal-Mart Stores Inc. who opted out over concerns that the settlement gave Visa and MasterCard too much freedom to raise rates in the future. In choosing to opt out these merchants gave up their rights to claim their part of the $7.2 billion settlement and instead have filed additional legal suits continuing their ongoing battle with the card companies over Interchange fees. Visa has since filed their own legal action asking the court to rule that the card companies’ fee practices are not illegal in an attempt to prevent “the continuation of endless, wasteful litigation.”
For the rest of us who didn't do anything to opt out by the May deadline, we are in the merchant class and ready for the next step. A hearing on final approval is set for Sept 12, 2013. After that it is expected that official claim notices will be mailed to all eligible merchants.
The settlement will create two funds. The first is the Cash Fund which is estimated at $6 Billion (net of attorney and admin fees) to pay claims based on Visa and MasterCard Interchange fee volume between 2004 and 2012. The second is the Interchange Fund at $1.1 Billion (net of attorney and admin fees) to pay claims based on Visa and MasterCard sales volume July 2013 to March 2014. It is unclear at this time whether there will be a single claim process for both funds or if they will be run separately.
What has become clear is that most merchants will benefit from expert assistance to file a claim in order to be compensated from the available funds. It is unknown if the claim process will provide merchants with a settlement amount but what has been documented is that given the lack of data available this estimate (if provided) is likely to be about 50% less than what merchants could get by filing through a recovery firm with access to your actual processing history. The added clout of the recovery firm with the settlement administrator will provide for greater negotiation power for maximizing claim value.
It is further estimated that as many as 80% of merchants will not file a claim without help. It’s a complex 27-page court document outlining a process that must be performed accurately or the claim will be disqualified. Given the fund pay out is based on the actual number of claims, merchants that do file are likely to recover a greater share of the fund.
As your merchant advocate, don’t worry, we’ve go you covered. For actively processing Vantage merchants, we have partnered with Managed Care Advisory Group, LLC (MCAG) who is a leading class action settlement expert providing services to more than 3 million merchants and with a proven track record of increased recoveries. Vantage clients will find a great deal of value in optimizing their claim and removing the administrative burdens of filing a claim with this service.
We will be providing all necessary historical data to MCAG in batch format for them to perform data analysis and complete and file all required documentation on behave of all our merchants. MCAG are experts and will be set up to handle all merchant inquiries by phone and website throughout the entire process. Our clients will also be able to add previous processor merchant accounts using this service to further simplifying the claim process and insuring maximum recovery.
Vantage will be sending emails to all clients and publishing statement messages with more information on participating in this value added service over the coming weeks and months. As always, please contact us with any questions or email us at firstname.lastname@example.org.