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Visa, MasterCard Lawsuit Settlement Leaves Big Cash for Shops

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Auto repair shops now have the opportunity to recoup thousands of dollars in cash reimbursement from two major credit card providers following the multi-billion dollar settlement of a class-action lawsuit.

Early in 2006, several retailers filed a class-action antitrust lawsuit against Visa Inc., MasterCard Worldwide and various partner banks, such as Bank of America, Capital One, Wells Fargo, Bank One and Chase.

The lawsuit alleged that Visa, MasterCard and their respective member banks agreed to set, apply and enforce rules for merchant fees, which caused businesses to pay excessive interchange fees for accepting Visa and MasterCard credit cards, says Zachary Giammarco, member of Giammarco Law Office, based in Chandler, Ariz.

Visa and MasterCard claim those practices to be legally justified, but they opted to settle the case after years of litigation and mediation sessions. The lawsuit is more than seven years old, but the final monetary judgment is just now awaiting approval—a decision that could be announced any day, Giammarco says, who is advising credit card merchants on how to handle the settlement process.

David Cherney, vice president of business development for Salt Lake City–based Digital Financial Group, a credit card processing merchant that works with hundreds of repair shops, says a $7.25 billion settlement was approved by a New York district court judge on Dec. 13.

That means repair shops nationwide that accept Visa and MasterCard payments are sure to get money back, Cherney says. Visa and MasterCard constitute roughly 85 percent of most shops’ credit card volume, he says, so the average shop owner stands to recoup significant sums of settlement money.

The Settlement

The lawsuit’s class of plaintiffs, which includes all retailers that accept Visa and MasterCard payments, were mailed a notice in March 2013 that outlined requirements to participate with the proposed settlement. If you didn’t get it, or no longer have it, there are a few steps you must take to ensure you collect what you’re owed.

Giammarco says the proposed settlement is divided into two classes, which will be paid out separately:

Cash Settlement Class. This class includes a $6.05 billion Cash Settlement Fund. Once the settlement is approved, that money will be distributed among all businesses that transacted Visa or MasterCard payments in the United States between Jan. 1, 2004, and Nov. 28, 2012.

Your Portion. Cherney says shops will receive portions of this fund based on the monetary volume of Visa and MasterCard payments processed for that nine-year period. Experts estimate that businesses could recoup $400–$600 for every $100,000 processed through Visa and MasterCard.

Cherney says the average shop location out of the hundreds of facilities he works with processes roughly $30,000–$40,000 each month through those carriers, which would amount to reimbursement of about $13,000–$17,000. Cherney says many high-volume shops could generate $20,000–$30,000 of cash reimbursement.

Your Responsibilities. A claim form will be available for businesses and a submission deadline will be set once the settlement is approved. Every shop that files a valid claim form with the court will receive settlement money, Cherney says. To complete the form, shop owners will need to provide a current statement of credit card transactions and all of the merchant identification numbers (MID) for any credit card merchants they’ve used since 2004.

Interchange Settlement Class. This class includes a $1.2 billion Interchange Fund. Businesses will receive a processing fee rate reduction for Visa and MasterCard transactions in the United States for an eight-month period following approval of the settlement, Cherney says.

Your Portion. Cherney says the amount that shops receive from this fund will be calculated based on monetary Visa and MasterCard transaction volume during that eight-month period. Businesses will receive 0.01 percent of their Visa and MasterCard dollar sales during the eight-month period.

A shop that processes $30,000 a month in Visa and MasterCard transactions, for example, will receive $240 in total fee reductions during that eight-month period, Cherney says. 

Your Responsibilities.  Cherney says every shop that files a valid claim and accepts Visa or MasterCard payments during the eight-month period will receive money from this fund.

The claim forms were not yet made available at the time this article was published. The court will soon approve a claim form and determine a submission deadline for business owners now that the final settlement amount is approved. Shop owners can obtain the claim form directly from the official settlement website,

Shop owners can obtain the claim form directly from the official settlement website.

Be Careful Whom You Trust

Cherney says the process for submitting claim forms is expected to be very simple. He suggests consulting with your attorney or credit card merchant if possible, but it’s something that owners can do on their own.

There has been a flurry of attorneys and merchants taking advantage of the situation by calling shops and claiming they can recoup a larger portion of money if shops use their services; those claims are false.

“Scams are everywhere,” Cherney says. “Any letter or solicitation shop owners get from an attorney or merchant claiming they can get a better refund is baloney. Beware of the scams.”

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