Visa, MasterCard Class-Action Suit Could Yield Billions
NEW YORK — Online adult companies could benefit from antitrust litigation started more than six years ago over payment card interchange fees.
The potential payout for all companies — adult and mainstream — that offered Visa and MasterCard credit and debit cards could be huge, upwards of $6 billion.
"Any company that accepted Visa and MasterCard credit and or debit cards beginning in 2004 will be eligible to participate in the settlement," Patrick Jermyn, an attorney with Harrison, N.Y.-based Class Action Refund LLC told XBIZ.
Jermyn says the nuts and bolts of the class-action suit revolves around the presumption that Visa and MasterCard, along with their member banks, conspired to fix and artificially inflate the interchange fees that merchants pay to accept Visa and MasterCard branded debit and credit cards.
"Visa and MasterCard have anti-steering restraints that prohibit merchants from favoring other accepted brands, prohibit charging consumers a surcharge for using a Visa- or MasterCard-branded card, and prohibit the establishment of a minimum purchase price for Visa or MasterCard- branded cards," Jermyn said.
"In addition, Visa and MasterCard have 'honor all cards' rule, despite some having higher interchange fees, and they also require credit card and off-line debit transactions to be processed only through Visa and MasterCard’s network."
Jermyn said that any settlement in the case will be in the billions of dollars, and the case is coming to a head with settlement discussions on-going and a trial date set for September.
"This case has the potential to yield a $6 billion settlement, more or less, and Visa and MasterCard have set aside a significant sum to handle any potential payout," he said. "During the relevant time frame, there is a good possibility that you could receive a substantial refund."
That relevant time starts in 2004 and could go as far as 2011, Jermyn said. "The end date still has not been determined," he said.
Online adult companies are prime plaintiffs, given the volume of credit card purchases, Jermyn said, and he plans on attending The Phoenix Forum to meet and greet potential adult industry clients.
Working on a contingency basis, his firm — one of many class action recovery firms working on the suit — already has retained a number of adult clients.
The case, filed at U.S. District Court in New York, started about 6-1/2 years ago and has a staggering amount of filings in the federal court system — 1,578 — involving a battalion of attorneys on both sides.
A recent motion hearing, for example, involved 32 attorneys — 16 for plaintiffs, 16 for defendants — in the courtroom. Ten attorneys at that hearing were involved in the oral arguments of the particular motion.