Visa and MasterCard ordered to repay consumers $800 million
09 April 2003 | 5100 views | 0
A Californian court has ordered Visa and MasterCard to refund more than $800 million paid by US cardholders in foreign currency conversion fees.
The court found that Visa and MasterCard violated California's unfair competition law by failing to adequately disclose the currency conversion fees they have charged to US cardholders who used their credit cards while on trips abroad.
Lawyers acting on behalf of the plaintiff argued that by embedding the fee in the transaction amount, the card companies had made a deliberate effort to conceal the charges and deceive consumers.
California Superior Court Judge Ronald Sabraw ordered Visa to refund the one percent currency conversion fees to all Visa consumers in the United States who paid the charges from 15 February, 1996 to the present. The court also ordered MasterCard to refund fees paid by Californian consumers during the same period.
The two card schemes were also ordered to amend their operating rules to require member banks to make effective disclosure of the fees to consumers
Visa and MasterCard have until the end of the month to devise a plan of restitution.