Almost every adult in UK could receive £300 payout from Mastercard after court ruling

Almost every adult in UK could receive £300 payout from Mastercard after court ruling

Business News

Almost every adult in the UK could be due a payout averaging £300 after a surprise court ruling paved the way for a £14bn lawsuit against Mastercard to go ahead.

The claim brought by former financial ombudsman Walter Merricks alleges that more than 46 million people overpaid on purchases because of Mastercard’s high fees.

On Tuesday the Court of Appeal ruled that a lower court must reconsider the case. If successful, it could lead to redress payments of hundreds of pounds for millions of people.

“I am very pleased with today’s decision,” said Mr Merricks. “It is nearly 12 years since Mastercard was clearly told that they had broken the law by imposing excessive card transaction charges, damaging consumers over a prolonged period.

“When challenged, all they have done is to raise technical legal arguments that turn out to have no merit – as the court of appeal has shown today. It’s now time for Mastercard to admit the damage they did, to apologise to the British public, and to agree to pay the compensation they owe.”

Mastercard said it continued to “disagree fundamentally with the basis of the claim”.

“This decision is not a final ruling and the proposed claim is not approved to move forward; rather, the court has simply said a rehearing on certain issues should happen,” it added.

The claim alleges that, because of fees charged by Mastercard, consumers paid higher prices to businesses that accept the company’s cards than those that don’t. This occurred over a 16-year period between 1992 and 2008 and breached EU competition law, resulting in an estimated £14.6bn detriment to consumers, the claim alleges.

If Mastercard loses the case anyone who can prove they were in the UK for those 16 years could be due a payout.

Because the argument is that all shops who accepted Mastercard charged higher prices, people who never had one of the company’s credit cards would be in line for compensation.

There is still some way to go in the case, and Mastercard has said it plans to appeal the latest decision.

The Competition Appeals Tribunal initially ruled that the claim could not proceed because even if loss to all 46 million people in the class could be proved, it could not be shown how much detriment each individual consumer had suffered.

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