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Currency Conversion Fee Antitrust Litigation (MDL 1409) Settlement
Posted By Jim On 12/11/2007 @ 8:48 am In Credit | 82 Comments
Did you know that there was an anti-trust case brought against the major credit card issuers regarding foreign transaction fees ? For those who aren’t aware of foreign transaction fees, these are fees that some card issues add onto a credit card charge made in a foreign currency. This fee can range anywhere from 1-3%, though some issuers will absorb the fees. These fees are not the cost of converting the currency, which is likely absorbed in the exchange rate used by the credit card company. Well, today these foreign transaction fees are often broken out and detailed on the credit card bill itself (sometimes as a mere asterisk indicating a x% fee was levied for this foreign transaction, sometimes an actual dollar amount) but this wasn’t always the case. In the past, card issuers wouldn’t even mention a transaction fee was levied and buyers would merely see a poor exchange rate.
But the fee itself wasn’t the problem, plaintiffs claimed that the Visa and MasterCard networks, their member banks, and Diners Club conspired to set the fees and conceal them from the public by inflating their exchange rates (essentially hiding the fee in the rate). Which cards are included?
Visa- and MasterCard-branded credit cards (including charge cards) and debit/ATM cards (including stored value and payroll cards), and Diners Club-branded credit cards (including charge cards). The Visa-branded cards include Visa-, Interlink-, and Plus-branded credit and debit/ATM cards; the MasterCard-branded cards include MasterCard-, Cirrus-, and Maestro-branded credit and debit/ATM cards. The lawsuit includes purchases, cash advances, cash withdrawals, and internet transactions.
So, the defendants have now elected to settle and set aside $336M to pay for it all. If you wish to participate in the settlement, what you’ll need to do is choose one of three options . The option you choose will depend on your level of international travel and how much you’ve spent in the years between 1996 and 2006.
I think I’ll probably do Option 1 or perhaps Option 2, since I’ve traveled internationally quite a bit to visit family in Taiwan and on vacations abroad. I have yet to review the claim form to see the level of rigor involved but it seems relatively straightforward.
The deadline to file this has been extended to May 30, 2008.
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 foreign transaction fees: http://www.bargaineering.com/articles/foreign-currency-transaction-fees-list.html
 one of three options: https://www.ccfsettlement.com/claim/?action=choose
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