Visa/ Mastercard Settlement Takes Major Step Forward
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On September 12, 2013, Judge John Gleason of the United States District Court for the Eastern District of New York listened to arguments from the proponents and opponents of the proposed Visa / MasterCard settlement. The hearing is the last step in confirming the settlement. Almost 800 attorneys attended the hearing, including CST co-founder Wayne Babovich (right) and Mark Ellis (left) of Settlement Recovery Group.
Judge Gleason questioned both sides on their arguments and reaffirmed his position that the settlement agreement is a compromise. Many large retailers have decided not to pursue a claim through the class action, leaving a higher proportion of the settlement proceeds available for small to mid-size merchants.
The hearing occurred almost a year after Judge Gleason issued a preliminary approval in November, 2012. A final ruling is anticipated in the next 30 to 120 days. Thus, a decision is expected by January 2014. When approved, as anticipated, the matter will proceed to the final notification and calculation stages.
At the hearing, proponents of the settlement argued strongly that the settlement provided an opportunity for small businesses that would otherwise be unable to participate. Opponents, such as Wal-Mart, argued that the terms and conditions of the settlement were often illusionary, and insufficient.
If the settlement is approved, then the Court appointed Settlement Administrator will send out notices which will include an estimate of interchange charges paid by each individual merchant. While the payment structure and formula remains tentative, a trade association actively involved with the process has published its determination that payouts will in all likelihood be derived from a merchant specific sample based upon a selected three month period during the 2008-2009 calendar year. Obviously, this calculation will be exactly that, an estimate and will vary based on the months selected, and the seasonal nature of the business, and other variations unique to the particular merchant.
CST and its affiliates are prepared to assist merchants in assuring an accurate assessment of interchange charges actually paid. CST can help a merchant ensure a maximum payout under the terms of the settlement.
