A claim seeking up to £19bn in damages for UK consumers has been issued against MasterCard using the collective proceedings regime introduced by the Consumer Rights Act 2015 (which amended the Competition Act 1998). The Claim is being led by ex-chief ombudsman of the Financial Ombudsman Service Walter Merricks and relates to certain fees charged by MasterCard whenever a customer used their card to make a payment (interchange fees).

The interchange fees historically levied by MasterCard have been the subject of litigation for many years; in September 2014, the Court of Justice of the European Union ruled that the cross-border interchange fees levied by MasterCard unlawfully restricted competition and affected trade between member states (Case C-382/12). The CJEU ruling triggered claims against MasterCard by a number of UK retailers; these claims remain ongoing and one issue facing the claimant retailers is an allegation that they passed the fees on to their consumers and did not suffer loss themselves. The same allegation is as the heart of the new action brought on behalf of UK consumers: it is alleged that unlawful fees charged by MasterCard were passed on to consumers with the result that they paid more than they should have done; by some estimates, the unlawful fees passed on to consumers between 1992 and 2008 amount to £450 per person.

MasterCard reduced its interchange fees in 2008 and the claim does not concern interchange fees charged by MasterCard after that reduction. It should also be noted that interchange fees are now subject to specific regulation (the Interchange Fee Regulation) which, amongst other things, introduced a fee cap for such fees on 9 December 2015.

The next step in the collective proceedings is for the Competition Appeal Tribunal to decide whether to make a “collective proceedings order” under section 47B of the Competition Act 1998 which would allow the proceedings to continue.