MILLIONS of Brits are one step closer to getting a £300 payout.
The courts have dismissed Mastercard’s challenge against a class action lawsuit on behalf of consumers.
It’s the first case of its kind in UK history and could see millions of consumers get the payout.
The legal claim is led by Walter Merricks, who alleges that over 46million people were overcharged by the card company over more than a decade.
The Court of Appeal dismissed Mastercard’s final challenge to the suit last week.
Mr Merricks, a lawyer who once led the Financial Ombudsman Service which handles consumer disputes with banks, alleges millions of Brits were overcharged for a 15-year period between 1992 and 2008.
The exact value of the claim is disputed but could total more than £10billion.
Mr Merricks and his lawyers claim it is worth up to £17billion and the 46million consumers affected could get around £300 each.
The claim does not include those who are now deceased or compound interest, which Mastercard previously said reduces the claim to around £10billion.
It’s still too early to say if Brits will definitely receive a payout and whether it will be handed out automatically and it’s unlikely to be anytime soon.
Most read in Money
Today, Mr Merricks has started an ad campaign to tell people about the lawsuit and the criteria for joining.
If you’re a UK citizen and lived here for three months between 1992 and 2008 then you won’t need to do anything to join.
But, if you didn’t then you might need to opt-in to the lawsuit.
Mr Merricks said: “Today I’m reaching out to 46million UK adults with news about the claim I’m bringing on your behalf against Mastercard.
“People are waking up to consumer rip-offs by big international companies like Mastercard.
“In this case all UK adult shoppers lost out by paying higher prices than we should have done because of an ‘invisible tax’ that Mastercard was responsible for.”
A spokesperson for Mastercard said: “This case isn’t about helping consumers.
“This flawed claim is being pushed by lawyers and their financial backers primarily focused on making money for themselves, and is likely to take years to conclude.
“We will continue to fight it and are confident that, once the facts are presented in court, the case will be thrown out.”
Mr Merricks believes Mastercard wrongly levied fees on transactions made between May 22, 1992 and June 21, 2008.
These fees were paid by retailers accepting Mastercard payments, rather than by consumers themselves.
But Mr Merricks argues shoppers have lost out as retailers passed on these fees in the form of higher prices.
How do I claim compensation?
If Mr Merricks ultimately wins, everyone who made a transaction at a retailer that accepted Mastercard payments during this time frame could be entitled to a payout unless they explicitly refuse it.
This is because the claim has been approved by the Tribunal to proceed as an opt-out case.
In simple terms, if you don’t opt-out, you’re in.
That means that Brits would be entitled to the payout without having any direct involvement with the trial and regardless of whether they had a Mastercard.
So, if a UK consumer – or the person whose estate they represent – was living in the UK on September 6, 2016 and they meet criteria to be in the class, they are included in the class and do not need to do anything.
If were not living in the UK on this date in 2016, but meet the criteria to be in the suit, and want to be in it, you’ll need to opt-in.
To opt-in or opt-out you can go to mastercardconsumerclaim.co.uk
The Mastercard case
In August last year the courts gave the go-ahead for the class action lawsuit.
The Competition Appeals Tribunal (CAT) gave the green light for the case to proceed to trial.
It followed the Supreme Court judgement in 2020 which moved the case to the CAT for a decision.
The Mastercard case was previously thrown out of the CAT back in 2017 when it said it couldn’t decide on this type of case and would therefore not allow it to go to trial.
Mr Merricks then appealed to the Court of the Appeal, which ruled in his favour.
At this point, Mastercard appealed the decision to the Supreme Court, and that appeal was dismissed in December 2020, pathing the way for the CAT to decide.
The CAT decision last August means that the case will be now heard in court, and the trial will determine if Brits get the compensation.
It’s the first time a US-style class action lawsuit has been given permission to be heard in the UK after a change to the law in 2015.
Mr Merricks said: “Totalling up to £17 billion pounds, it’s the biggest claim in UK legal history.
“Not surprisingly Mastercard have been trying slow up the case ever since I started it 6 years ago.
“Its attempts to stop the case from proceeding have all failed.
“It’ll still take a while yet, but today is a key milestone. Do look at our website for information as the claim proceeds.”
Collective claims for compensation
Lawsuits that result in compensation for many people are often referred to as “class action”.
In England and Wales a Group Litigation Order (GLO) is often used for this kind of lawsuit,
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 for a GLO.
Both sides can also appeal decisions at various stages making it a lengthy process with no guarantee of a payout.
Collective actions are rare – there have only been around 100 cases since 2000 according to the HM Courts and Tribunals Service.
Since the changes in 2015, there has been only one mass claim launched – this Mastercard case.
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 and that can be as much as 30%.
There’s no guarantee of a payout and collective claims of this type have not yet been fully tested in court.
None have been given permission to go ahead as a collective action like Mastercard has.
Millions of Easyjet customers who had their personal details stolen in a data breach could make a claim for compensation.
British Airways, Virgin Media and Equifax are also the subject of collective claims after data breaches.