UK court finalises £200m Mastercard settlement

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

In December, Mastercard reached a deal with the man behind the case, Walter Merricks, to settle the years-long litigation, which was brought on behalf of tens of millions of Brits over credit card fees.

However, the litigation funder, Innsworth Advisors, challenged the settlement saying that it undervalued the claim. Initially, the case was estimated to be worth around £10 billion.

Merricks, the former head of the UK Financial Ombudsman Service, filed the suit in 2016, accusing Mastercard of overcharging Brits for credit card interchange fees between 1992 and 2008.

Anyone who lived in England, Wales, Scotland or Northern Ireland for at least three months during those years, and bought goods or services from UK businesses that accepted Mastercard credit cards can claim.

If 2.5 million people come forward, they each will receive £45. If fewer people claim, payments will be capped at £70.

Having backed Merricks, Innsworth has fallen out with him over his decision to back the settlement.

In a statement this week, he says: “Not only have I had to fight Mastercard, but I also had to fight Innsworth Capital.

“To try to prevent me from settling when I believed it was in the best interests of my class to do so, it threatened and then commenced legal action against me personally seeking unlimited damages which might have meant my bankruptcy.”

For its part, Innsworth called the settlement “extraordinarily low proportion” of the original claim that could deter firms from backing future claims.