NEW YORK (AP) — A group of retailers and trade groups has launched a last-ditch effort to stop a settlement worth at least $6 billion that Visa Inc., MasterCard Inc. and major banks have agreed to pay retailers for alleged fee fixing.
Ten out of the 19 retailers and trade groups that are plaintiffs in the class-action lawsuit against the credit card companies say they're trying to block the deal because they believe it would allow the credit card industry to continue to take advantage of merchants and their customers while stopping competition.
The proposed settlement, which was disclosed in July, is expected to be submitted to the U.S. District Court in Brooklyn by Oct. 19. Merchants objecting to the deal will then have 30 days to submit arguments urging the court to reject the proposal.
Under the settlement, stores will be allowed to charge customers more if they pay with a credit card. The settlement covers only U.S. transactions. But the plaintiffs says that the settlement will not stop swipe fees from continuing to rise, which will hurt both retailers and shoppers, and that it will prevent any future legal challenges.
"There is strong concern among our member companies that the proposed settlement will not achieve the litigation's most critical goal — to fundamentally change a broken marketplace in which swipe fees are set," said Dawn Sweeney, president and CEO for the National Restaurant Association, one of the plaintiffs opposing the settlement. "We don't expect any settlement to address every flaw of the current system, but we cannot allow it to lock in the worst elements."
Other recent plaintiffs to join the growing chorus include D'Agostino Supermarkets, and Jetro Cash & Carry Enterprises, a supplier that serves grocery retailers and food-service operators.
They join other trade groups including the National Association of Convenience Stores, National Grocers Association and National Community Pharmacists Association. Other retailers, including Wal-Mart Stores Inc. and Target Corp., that are not part of the class-action suit also have expressed objections.