Millions of Visa and Mastercard holders may be eligible for refunds as part of a settlement stemming from a class-action lawsuit alleging unfair ATM fees. The total settlement amount reaches $192 million, with Visa contributing $104.6 million and Mastercard $92.8 million.
The Core of the Dispute
The lawsuit accused Visa and Mastercard of facilitating inflated ATM fees charged by banks within their networks in the United States. While neither company directly sets these fees or issues cards, the claim centers on allegations that banks unfairly increased surcharges without adequate disclosure to consumers. This resulted in higher transaction costs for both cardholders, and retailers.
It’s important to note that Visa and Mastercard have not admitted any wrongdoing as part of the settlement – a standard clause in many such legal resolutions. However, their agreement to pay the substantial settlement amount signifies a move to resolve the dispute.
Who Qualifies for a Refund?
Eligibility for a refund is tied to specific criteria. Individuals who may qualify include those who:
- Paid an unreimbursed ATM surcharge using a Visa or Mastercard debit card between , and .
- Incurred the surcharge from a U.S.-based bank participating in the Visa or Mastercard ATM network, such as JPMorgan Chase, Wells Fargo, or Bank of America.
Conversely, individuals are ineligible if they have already received a refund for the same ATM fees through a previous settlement, or if their debit card was issued outside of the United States.
Broader Context: Swipe Fees and Merchant Settlements
This settlement arrives alongside other recent developments concerning credit card fees. A separate, more recent settlement between Visa, Mastercard, and merchants, announced in , addresses a long-standing battle over “swipe” fees – the charges levied on retailers each time a customer uses a credit card. These fees typically range around 2% or more per transaction.
Previously, merchants were required to accept all cards within a network. The new settlement allows merchants to reject cards with higher fees, potentially enabling them to save on transaction costs. Retailers may be able to pass these costs onto consumers by charging different fees based on the type of credit card used. This shift could lead to a more nuanced pricing structure at the point of sale.
According to Ted Rossman, a senior industry analyst at Bankrate, This is a fight between banks and merchants, and consumers are caught in the middle.
This highlights the complex interplay of interests and the potential for consumers to be impacted by changes in fee structures.
Recent FTC Actions and Consumer Refunds
The Federal Trade Commission (FTC) has also been actively involved in securing refunds for consumers affected by deceptive financial practices. In , the FTC sent over $11 million in refunds to individuals who lost money to a credit card interest rate reduction scam. More recently, in , the FTC announced it was distributing $5 million in refunds to victims of a deceptive credit repair scheme.
Other Financial Pressures on Americans
These settlements and refund distributions occur against a backdrop of broader financial pressures facing American households. Data from the Urban Institute indicates that approximately six million Americans are currently behind on their student loan payments, returning to pre-pandemic levels. This suggests a growing strain on personal finances for a significant portion of the population.
Implications and Next Steps
The $192 million Visa and Mastercard settlement offers potential financial relief to millions of consumers who incurred ATM surcharges over a nearly two-decade period. The evolving landscape of credit card fees, as evidenced by the recent merchant settlement, suggests a potential shift in how these costs are distributed between banks, merchants, and consumers.
Consumers who believe they may be eligible for a refund from the ATM fee settlement should monitor for official announcements regarding the claims process. Details on how to submit a claim and the deadline for doing so will be crucial for those seeking reimbursement.
