Visa, Mastercard to pay $168M to settle ATM fee lawsuit
What's the story
Visa and Mastercard have agreed to a combined settlement of $167.5 million in a class-action lawsuit. The companies were accused of colluding to keep ATM access fees high. The proposed settlement was filed in Washington's federal district court and is subject to judicial approval. The agreement would compensate millions of users who paid an unreimbursed access fee for cash withdrawals from independent non-bank ATMs.
Fund allocation
Settlement fund distribution and eligibility
Visa will contribute about $88.8 million while Mastercard will contribute around $78.7 million to the settlement fund. The funds would be distributed among eligible customers with qualifying ATM transactions since October 2007. This is part of the companies' effort to resolve the allegations and compensate affected users for their financial losses due to high ATM access fees over the years.
Legal history
Background of the lawsuit and previous settlements
The lawsuit, one of three similar cases in the DC federal court, was filed in 2011. Consumers challenged industry rules by Visa and Mastercard that allegedly prevented independent ATM operators from charging lower prices. Last year, the two companies agreed to pay $197.5 million to resolve similar claims from another group of ATM users who claimed they were overcharged at bank-operated ATMs.
Fee distribution
Legal fees and pending lawsuits
Lawyers for the plaintiffs in a court filing called the settlement "an excellent result in light of the risks of continued prosecution." They said they planned to ask the court to award them up to 30% of the fund, or about $50 million, in legal fees. A third lawsuit by independent ATM owners and operators is still pending in the same court.