Retailers file appeal over credit card swipe fee settlement

The National Retail Federation (NRF) filed an appeal on Monday to overturn a multi-billion settlement over credit card swipe fees.

The NRF is asking the 2nd U.S. Circuit Court of Appeals to overturn a lower court’s ruling that required Visa and MasterCard to pay $5.7 billion to cover merchants costs of charging fees to swipe their cards.

ADVERTISEMENT
"The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future," said Mallory Duncan, NRF's senior vice president and general counsel. 

"Instead of lowering fees, the card industry’s settlement proposes that merchants pass them along to consumers in the form of surcharges," he said. 

"That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging."

Merchants filed the lawsuit in 2005 arguing that the swipe fees were improperly fixed by the card companies and that the settlement gave them no ability to put up a legal fight in the future.

Duncan argued that the retail industry has not agreed to the settlement and, instead, it only covers nine retailers whose views don't represent the industry. 

"A majority of the original plaintiffs in the case repudiated the settlement as soon as they saw its terms, the nation’s largest retailers have spoken out against it, and close to 8,000 retailers and merchants have formally rejected the proposal," Duncan said. 

"This is an abuse of the class action system and should never have been approved."