Judge Orders Changes to Swipe Fee Settlement Sites

NEW YORK -- The battle over credit card swipe fees has been going on for nearly eight years, but it took a U.S. judge only 15 minutes to scold retail trade groups for taking their objection to a proposed $7.2-billion deal to the Internet.

U.S. District Court Judge John Gleeson singled out the merchantsobject.com website launched by NACS, the Association for Convenience & Fuel Retailing, which tells merchants to "take action" and says their options are to "opt out" or "object." He said the wording of the websites could prompt merchants to think that accepting a settlement is not an option, according to Reuters.

"It's not fair," Gleeson said during the Thursday afternoon hearing in District Court, Eastern District of New York in Brooklyn, N.Y. "It's completely misleading."

Gleeson's ruling came in response to a request from attorneys looking to settle the 2005 class-action lawsuit. The law firms representing the proposed class of merchants contend that organizations including NACS, the National Grocers Association and National Community Pharmacists Associations, which want to derail the deal, are putting retailers at risk by urging them to opt out of the settlement without advising them of their rights, as CSNews Online previously reported.

The judge gave the lawyers -- for both pro- and anti-settlement retailers -- one week to submit proposals on appropriate relief. He said he would not order the sites be taken down, but would be willing to consider such relief as a website banner telling visitors that he had found information previously posted to be misleading, according to the news report.

Thursday's hearing was just the latest legal round over the proposed settlement announced in July. Though the deal faced immediate opposition from numerous retailers and retail groups -- even some not involved in the litigation -- Gleeson granted preliminary approval to the deal in November.

The preliminary approval was immediately challenged by NACS and other plaintiffs in the lawsuit.

Approximately 8 million merchants have until May 28 to opt out or object to the deal. A fairness hearing to determine whether the settlement should be granted final approval is scheduled for Sept. 12.