Retail group against revised card settlement

Litigation Reports

A proposed settlement in a class-action lawsuit brought by retailers and trade groups against Visa Inc. and MasterCard Inc. fails to protect merchants from abuse by credit card companies, a national retail group says.

The lawsuit, which dates to 2005, centers on the subject of swipe fees — charges banks collect every time a Visa or MasterCard is used to pay for a purchase.

The proposed settlement terms, initially disclosed in July, were revised and filed Friday with U.S. District Court in Brooklyn.

But changes to the deal failed to win over many of the retailers represented by the National Retail Federation.

In a statement Mallory Duncan, the trade group's general counsel, said that the proposed deal does virtually nothing to protect retailers or their customers, and it attempts to silence any objections for years to come.

"Retailers would rather take their chances in court than accept this one-sided swindle written by the card industry for the card industry," he added.

The National Retail Federation, the nation's largest retail trade group, is not a party to the lawsuit.

In a statement Friday, Visa called the settlement a fair and reasonable compromise.

Under the proposed settlement, stores will be allowed to charge customers more if they pay with a credit card. The pact covers only U.S. transactions.

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