As many as 46 million British adults could be in line for a payout from the financial services giant MasterCard after a tribunal ruled that a class action lawsuit could potentially be brought against the company.
MasterCard is accused of imposing excessive card transaction charges in ways that resulted in additional fees being passed along to retail consumers over a period of 16 years between 1992 and 2008.
The former financial ombudsman Walter Merricks has taken legal action against MasterCard in relation to the issue via the Competition Appeal Tribunal, which threw out the case two years but has now been told by the Court of Appeal that it should reconsider its verdict.
As a result, MasterCard could become the subject of the largest class action lawsuit in British legal history and face a £14 billion compensation bill.
Estimates are that MasterCard could be required to make payouts to almost every adult currently living in the UK if it were to lose a full-scale court case relating to the issue of overcharging.
Reports suggest that any resulting payouts to individuals would be worth anywhere up to £300 per person, with compensation potentially being due even to people who weren’t and never have been MasterCard customers.
“It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period,” said Mr Merricks in a statement after the Court of Appeal’s recent ruling.
“When challenged, all they have done is to raise technical legal arguments that turn out to have no merit – as the court of appeal has shown today,” he said.
“It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe.”
MasterCard has made clear that it intends to fight the case and has played down the significance of the ruling by the Court of Appeal.
“Mastercard continues to disagree fundamentally with the basis of the claim and we believe UK consumers receive real value from the security, convenience and consumer protection of our payment services,” a spokesperson for the company said.
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