Preliminary approval granted in credit card foreign currency transaction fee settlement
By Jeremy Simon
On Nov. 8, 2006, a federal judge in Manhattan granted preliminary approval to a $336 million settlement of lawsuit over the foreign-currency transaction fees charged to credit card users. The settlement, signed off on by U.S. District judge William H. Pauley, covers MasterCard, Visa or Diners Club credit card users who held the credit cards between Feb. 1, 1996, and the preliminary approval date. Final approval is set for November 2007.
The consolidated lawsuit had charged that credit card issuers had broken state and federal antitrust laws, disclosure laws, and other legal requirements with the fees they collected for converting transactions into a foreign currency or with a foreign merchant.
The credit card issuers deny any wrongdoing, but under the agreement will pay $336 million to establish a settlement fund to pay monetary claims by eligible cardholders. The credit card issuers will also disclose any fees they charge on billing statements and other documents. The settlement was reached in July 2006 following years of litigation.
Among the settling defendants are units of Visa, MasterCard, Bank of America, Citigroup, Chase and Washington Mutual.
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