More Retail Groups Join Credit Card Fee Fight
NEW YORK -- Two more retail groups have filed class action suits against Visa USA, MasterCard Inc. and a number of major banks over the fees they charge for processing credit card transactions, reported the Associated Press.
The latest cases, filed in the U.S. Court for the Eastern District of New York, were brought by the American Booksellers Association and the National Grocers Association and several of its members, including Affiliated Foods Midwest, Coborn's Inc., D'Agostino's Supermarkets and the Minnesota Grocers Association.
The target of the cases is so-called interchange fees, which are paid by the merchants each time a customer uses a debit or credit card to pay for a purchase. The fees ultimately are passed on to consumers by way of higher prices, AP reported.
"Soaring interchange fees are devastating the retail industry and increasing costs for all American consumers," Thomas K. Zaucha, NGA's president and chief executive, said in a statement to AP. He blamed the rising fees on lack of a competitive market.
A similar suit was filed in September by four of the nation's largest merchant associations. The plaintiffs in the earlier case -- the National Association of Convenience Stores, the National Association of Chain Drug Stores, the National Community Pharmacists Association and the National Cooperative Grocers Association -- represent thousands of merchants nationwide.
All of the suits accuse Visa, MasterCard and the card associations' member banks of engaging in collusive practices in setting their interchange fees, according to the report.
Both Visa and MasterCard have argued the fees are fair and have promised to fight the suits. In a statement to AP, Visa USA vice president Paul Cohen said the company remains confident it can defend the fees.
"While we respect that businesses want to find ways to lower their normal costs of doing business, merchants have many options to improve their economics that do not include costly and time-consuming litigation," Cohen said in the report. "It is disappointing that the plaintiffs’ attorneys continue to seek ways to undermine a system that creates enormous value for merchants, through increased sales, guaranteed payment and faster, easier transactions."
The latest cases, filed in the U.S. Court for the Eastern District of New York, were brought by the American Booksellers Association and the National Grocers Association and several of its members, including Affiliated Foods Midwest, Coborn's Inc., D'Agostino's Supermarkets and the Minnesota Grocers Association.
The target of the cases is so-called interchange fees, which are paid by the merchants each time a customer uses a debit or credit card to pay for a purchase. The fees ultimately are passed on to consumers by way of higher prices, AP reported.
"Soaring interchange fees are devastating the retail industry and increasing costs for all American consumers," Thomas K. Zaucha, NGA's president and chief executive, said in a statement to AP. He blamed the rising fees on lack of a competitive market.
A similar suit was filed in September by four of the nation's largest merchant associations. The plaintiffs in the earlier case -- the National Association of Convenience Stores, the National Association of Chain Drug Stores, the National Community Pharmacists Association and the National Cooperative Grocers Association -- represent thousands of merchants nationwide.
All of the suits accuse Visa, MasterCard and the card associations' member banks of engaging in collusive practices in setting their interchange fees, according to the report.
Both Visa and MasterCard have argued the fees are fair and have promised to fight the suits. In a statement to AP, Visa USA vice president Paul Cohen said the company remains confident it can defend the fees.
"While we respect that businesses want to find ways to lower their normal costs of doing business, merchants have many options to improve their economics that do not include costly and time-consuming litigation," Cohen said in the report. "It is disappointing that the plaintiffs’ attorneys continue to seek ways to undermine a system that creates enormous value for merchants, through increased sales, guaranteed payment and faster, easier transactions."