Millions of UK shoppers could be eligible for a payout of up to £70 after a final agreement for a £200 million settlement, relating to fees charged between 1992 and 2008, was reached by the Competition and Appeal Tribunal.
The settlement comes from a class action dating back to 2016 which alleged around 46 million consumers in the UK faced higher costs as a result of Mastercard unfairly charging businesses.
UK consumers will shortly be able to register to receive a payment by completing a simple online form, regardless of whether they ever held a Mastercard card.
So, are you eligible, and how can you apply for the payout?
Why does Mastercard owe consumers?
The agreement to pay compensation follows a class action lawsuit filed in 2016 by Walter Merricks, the former financial ombudsman. Merricks based the case on a 2007 European Commission ruling, which found that, since 1992, Mastercard had breached competition law by charging retailers “multilateral interchange fees” for accepting Mastercard payments.
Although these charges were paid by businesses, it was argued that approximately 46 million consumers were indirectly impacted, as retailers passed the cost on through higher prices.
Who can claim?
Compensation can be claimed by consumers who lived in England, Wales, or Northern Ireland for at least three months between June 1997 and June 2008, and made purchases from UK businesses that accepted Mastercard credit cards. For Scottish residents, eligibility applies from May 1992.
The total settlement amounts to £200m, with £100m set aside specifically for consumer payouts. Claims must be submitted by the end of this year. If 5% of eligible consumers — around 2.5 million people — come forward, each will receive £45.
If fewer claims are made, the individual payment amount will be capped at £70.
Walter Merricks Calls Mastercard Settlement ‘Fair and Just’
Walter Merricks, who brought the case against Mastercard, said he launched it because he believed the fees charged to retailers were unlawfully high and led to nearly all UK consumers paying higher prices over many years. He later acknowledged that this applied to a smaller portion of transactions than initially thought, and the £200 million settlement reflects that.
Merricks called the outcome “fair and just” and said it would have a meaningful impact on consumers. He confirmed that people would soon be able to register online to claim. Any unclaimed money is expected to go to the company that funded the lawsuit.