$336 million refund for foreign transaction fee payers
By Jeremy M. Simon | Published: April 20, 2007
Major U.S. credit card issuers have agreed to pay $336 million in claims for charging undisclosed currency conversion fees to Americans who used their credit cards and debit cards overseas. The agreement follows a deal from 2006 that resolved an ongoing court battle. Those credit card companies agreeing to the settlement include issuers such as MasterCard, Visa, Citi, Bank of America, Washington Mutual, Chase and First USA Bank. The deal does not involve American Express, which is also a defendant in the suit.
The deal means that credit card holders could get back the additional 2 percent in foreign transaction fees -- or the fees added to foreign currency purchases which are over and above the foreign currency fees that were already spelled out in credit card agreements. Exactly how much consumers get back depends on the amount of each claim, with those claims possibly retroactive to February 1996, depending on the final settlement terms.
According to a partner with Lerach Coughlin Stoia Geller Rudman and Robbins, one of the two law firms that filed the suit on behalf of credit card holders, that could mean a $300 settlement to the consumer who used a U.S. credit card for $2,000 worth of purchases overseas. Although the settlement will return money to credit card users, the fees will not be eliminated, but rather will be clearly disclosed in card agreements.
Lerach Coughlin noted that those individuals who are eligible for reimbursements will get terms of the final settlements as "stuffers" in their credit card bill, which they should be careful not to mistake for advertisements and discard. Additionally, the Lerach Coughlin partner said, settlement terms will also be published in newspapers, as well as on the law firms' websites, along with an electronic filing capacity, during a "lengthy" filing period.
While the credit card-issuing companies reached the agreement, the defendants have denied wrongdoing. Lerach Coughlin noted that a preliminary approval hearing for the deal is scheduled for September 11 at the U.S. District Court for the Southern District of New York in Manhattan.
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