Mastercard faces £14bn court case that could hand 46m shoppers £300 each

Mastercard is accused of charging shops unlawful transaction fees which resulted in more expensive goods and services for UK shoppers.

Mastercard is facing a £14 billion claim accusing it of charging over half a million shops and supermarkets unlawful transaction fees for processing Mastercard payments. It is claimed that retailers passed these costs onto UK shoppers by charging more on everything they sold. Sign up to stay updated.

Former Chief Ombudsman at the Financial Ombudsman Service, Walter Merricks CBE, who is leading the claim, said:

‘MasterCard charged billions of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers. It has already been found to have broken competition law, the basis of which was to protect consumers, and that cannot be disputed. There is no basis upon which MasterCard can contend that its card fees were not unlawful.’

About the Mastercard consumer claim

Merricks accuses Mastercard of charging unlawful fees on transactions processed over a 16 year period between 1992 and 2008. If the case is won, shoppers in the UK could be owed up to £300 regardless of whether they paid by cash, cheque, debit card or credit card.

The claim follows a legal finding by the European Commission that Mastercard charged illegal fees on transactions processed using its network. Merricks is claiming consumers paid more for goods and services than they would have had to pay if Mastercard hadn’t broken the law. 

The claim was first filed at the Competition and Appeals Tribunal in 2016 but was initially disallowed. Merricks took this to the Court of Appeal where it was overturned and the claim was eventually given the greenlight to proceed in August 2021.

Legal team behind the claim

Merricks has instructed the law firm Willkie Farr & Gallagher to represent him in this claim. It is being supported by barristers at Monckton and Brick Lane Chambers. Lead litigator Boris Bronfentrinker said: 

‘Mastercard has itself argued before English courts that any unlawful charges were passed on to consumers by retailers when trying to defend itself in cases brought by retailers. Despite arguing that consumers bore the cost of its illegal fees, Mastercard has made no efforts to try to compensate consumers.’

The Competition and Appeals Tribunal is currently considering whether Merricks’ claim should be tried alongside similar claims from UK businesses against Mastercard. A hearing is due to take place in May 2023 that will consider whether banks passed on the costs of unlawful fees to retailers and whether these retailers then passed these costs onto consumers. 

Consumers could have paid more than they should if they were 16 or over and living in the UK for at least 3 months between 22 May 1992 and 21 June 2008, and spent money in UK shops or supermarkets that accepted Mastercard as a means of payment.

Who is eligible for compensation?

In March 2022 Merricks won the right to represent around 3 million consumers who had a valid claim when the collective action was filed in September 2016 and have since died, and those who die before the case concludes. These claims can be sought by authorised representatives of their estates. 

Sign up to Consumer Voice to stay updated as the claim progresses. 

Mastercard continues to fight the claim

Mastercard has so far been unsuccessful in its fight to overturn the claim. A spokesperson from Mastercard said: 

‘This isn’t about helping consumers. This flawed claim is being pushed by lawyers and their financial backers trying to make money for themselves, and is likely to take years to conclude. We’ll continue to fight it and are confident that, once the facts are presented in court, the case will be thrown out.’

European Commission judgement on Mastercard

The European Commission found in 2007 that Mastercard had imposed unlawful fees on the transactions it processed across its business. It was found that these unlawful fees were paid by businesses that accepted Mastercard cards as payment for goods and services.

The Commission went on to state that consumers are likely to have paid higher prices for goods and services before businesses raised retail prices as a result of Mastercard’s unlawful fees. Mastercard lost its appeal against this decision in 2014.