MILLIONS of Brits are set for a share of a multi-million pound payout from Mastercard in a landmark legal case.
A £200million deal has been reached in a long-running dispute in which the card giant was accused of overcharging people for years.
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Walter Merricks, a former financial ombudsman, first launched the legal claim in 2016
He alleged that 46million shoppers in Britain were ripped off after fees were wrongly levied on transactions made over a 15-year period between 1992 and 2008.
These fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves.
But Mr Merricks claimed shoppers had lost out as retailers passed on these fees in the form of higher prices.
The lawsuit is the first of its kind in the UK, often referred to as a “class action”, after new rules were brought in under the UK’s Consumer Rights Act 2015.
It allows courts to treat similar claims as one rather than having hundreds or even thousands of separate individual cases.
Mastercard has proposed a £200milllion settlement in return for the legal action being dropped, with no admission of liability.
The amount and further details of how much individuals could get have been revealed in fresh legal documents.
It is far lower than the initial £10billion to £15billion Mr Merricks and his lawyers claimed shoppers were owed.
This would have worked out to as much as £300 each, though the amount and how many were affected was always subject to argument in court.
The settlement “in principle”, which is due to be heard by the Competition Appeal Tribunal on February 19, would see half the amount – £100million – shared among 44million shoppers, working out as £2.27 each.
But that could be higher if not all of them came forward to claim the cash.
Mastercard has proposed capping the amount each person can get at £45, while Mr Merricks has suggested £70.
The remaining £100million is set to be paid to Innsworth capital which funded the claim.
Collective claims for compensatio
Lawsuits that result in compensation for many people are often referred to as “class actions”.
In England and Wales a Group Litigation Order (GLO) is often used for this kind of lawsuit.
Collective Proceedings Orders (CPOs) are also used for claims of breaching competition law.
Collective action has been made easier under the UK’s Consumer Rights Act 2015.
It means the courts can treat similar claims as one, rather than having hundreds or even thousands of separate individual claims.
There are a number of stages to bringing this kind of lawsuit, including the courts needing to give permission.
Both sides can also appeal decisions at various stages making it a lengthy process with no guarantee of a payout.
Lawyers have urged Brits to join several other collective claims for compensation in recent years.
There is no cost to sign up, but the firm will usually take a cut of any payout if the claim is successful to cover legal costs.
There’s no guarantee of a payout and collective claims of this type have not yet been fully tested in court.
The exact amount the firm is due to be paid will also depend on the number of people who claim the cash.
The company, which funds costly legal battles in return for a share of the proceeds if it wins, has said it is disputing the settlement as it is lower than the multi-billion pound value of the claim when it launched.
Mr Merricks said at the time the settlement was reached in December, 2024: “I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed a settlement that I believe will deliver meaningful compensation to class members who choose to come forward to participate in the distribution of the damages.
“Ever since I began my claim I have aimed to ensure that the new regime for collective redress can be seen to work effectively and to do that I had to take my case to the Supreme Court.
“I now look forward to presenting the details of the settlement to the Tribunal for its consideration and approval.”
Will I get a payout from Mastercard?
You’re part of the claim automatically if all of the following apply, unless you previously opted out:
- You lived in England, Wales or Northern Ireland for at least three months between June 20, 1997 and June 21, 2010, or
- You lived in Scotland for at least three months between May 22, 1992 and June 21, 2010
- You bought something with a Mastercard credit card between the dates above
- You were older than 18 and living in the UK on September 6, 2016
Once the deal is approved, Mastercard will pay the money within 28 days.
This will then be distributed to those eligible, but it’s not clear yet how that process would work, or when people would see the money, as it’s the first case of its kind.
There’s still a possibility that the claim is not approved or is delayed, in what has already been a lengthy legal fight.
MERRICKS VS MASTERCARD
2015
New rules under the UK’s Consumer Rights Act 2015 mean collective claims can be made.
2016
Mr Merricks starts a lawsuit claiming that Mastercard overcharged shoppers.
2017
Mr Merricks claim was dismissed by the Competition Appeal Tribunal (CAT), as was an application to appeal the decision.
2018
The Court of Appeal ruled that Mr Merricks be allowed to appeal the CAT decision.
2019
Mr Merricks’ appeal was heard by the Court of Appeal and the decision was upheld.
Mastercard was then given permission to appeal that decision by the Supreme Court.
2020
After hearing the appeal, the Supreme Court dismissed it and ruled the case could go ahead.
2021
After hearing the case, the CAT ruled in Mr Merricks favour.
2022
Mastercard’s final challenge was dismissed in the Court of Appeal.
Late 2024
Mastercard and Merricks reach a proposed settlement.
2025
The Competition Appeal Tribunal is due to hear the settlement on February 19.