Small Businesses Sues Credit Card Companies – July.2005
A law firm representing a group of small businesses has filed a class-action lawsuit against the nation’s biggest banks charging them with illegally fixing prices of credit card transaction fees.
This issue is particularly important to people in the diamond industry because we are now working on margins in the low single digits so these charges are particularly significant.
The lawsuit, filed by the law firm Robins, Kaplan, Miller & Ciresi L.L.P, seeks injunctive relief to stop the alleged anticompetitive practices plus damages. It charges Visa, MasterCard, Bank of America, Citigroup’s Citibank, JPMorgan Chase, and other leading banks with setting card interchange fees at “supra-competitive levels,” which banks charge merchants every time a customer makes a purchase using a MasterCard or Visa card.
Merchants have little or no ability to negotiate with Visa and MasterCard for lower interchange fees, the attorneys charge. They noted that the issuing banks have the ability to set the interchange fees as high as they want, without any market force to restrain them.
In a statement, Visa denied any wrongdoing.