While Visa and Mastercard attempt an appeal, three banks settle antitrust case.
Bank of America, Wells Fargo and Chase agree to settle a class-action case for $66.7 million to resolve consumer antitrust allegations that they engaged in a conspiracy to fix ATM charges. Visa and MasterCard are challenging the class certification and their appeal is pending in the U.S. Court of Appeals for the D.C. Circuit.
The three banks were accused of “orchestrating, implementing, and facilitating a conspiracy to fix the fees ATMs charge to customers,” according to the suit. Evidence brought to support this included bank contracts from Visa and MasterCard, “which prevented independent ATM machine operators from reducing prices to beat the competition.” The lawsuit states that the “unlawful agreements effectively set a price floor for all ATM access fees throughout the country and deprive consumers of the benefits of natural price competition.”
In a court filing earlier this month in the U.S. District Court for the District of Columbia, lead class attorneys at Hagens Berman Sobol Shapiro, Quinn Emanuel Urquhart & Sullivan and Mehri & Skalet, said Bank of America NA agreed to pay out $26.4 million, Wells Fargo & Co is set to pay $20.8 million, and JPMorgan Chase & Co will pay $19.5 million.
The claims date back to 2011, at which time consumers began to complain that they were overpaying for surcharges tacked onto transactions at bank-operated ATMs. The plaintiffs first filed notice of the proposed settlement in fall of last year, and their notice was reviewed by U.S. District Judge Richard Leon, nominated to his post by former U.S. President George W. Bush. His order followed in August, granting class certification, at which time he ordered the plaintiffs attorneys to refile the proposed settlement.
The plaintiffs pushed back, asking that Leon delay his approval of the bank settlement despite the Visa and MasterCard appeal. The settlement terms allowed attorneys to seek up to about 33%, or $22 million, in attorneys’ fees.
Steve Berman, managing partner and co-founder of Hagens Berman, who argued the appeal before the D.C. Circuit, said, “Not only is this settlement a tremendous return for consumers, it also serves as a reminder that transparency and fairness are standards that cannot be skirted without a heavy penalty.”
The the nine-year-old case was filed by 13 machine operators and the National ATM Council, a trade association, seeking class-action status and accusing Visa and MasterCard of anticompetitive practices. Independent ATM operators were barred from charging debit card holders lower fees “when payments were routed through smaller competing payment networks,” the complaint alleged. It stated further, “Visa and MasterCard artificially raised the cost for consumers and limited revenue for operators of about 200,000 ATMs at gasoline stations and convenience stores.”
The suit was initially dismissed in 2013 but was reopened on appeal in 2015. The case is Mackmin v. Visa Inc, U.S. District Court for the District of Columbia, No. 1:11-cv-01831.
Sources:
Three U.S. banks agree to $66 million ATM antitrust deal, class counsel says
$66.7 Million Settlement Reached Against Big Banks in ATM Fee-Fixing Class-Action Lawsuit
Settlement Alert: Chase, Wells Fargo & BoA Bank Fees Class Action Settlement
Join the conversation!