Mastercard is set to pay customers up to £70 each following the approval of a £200million settlement in a long-running legal case.
But, what is the case, who is eligible for compensation, and how can you apply? Here’s what you need to know about the Mastercard payout.
What is the Mastercard payout about?
The payout stems from a landmark legal case triggered by a 2007 European Commission ruling. The ruling found that Mastercard’s “multilateral interchange fees” – charges applied to businesses each time customers made card payments – had breached competition law between 1992 and 2008.
Companies like Mastercard act as intermediaries between banks, businesses, and consumers, enabling card payments by providing essential services and technology. Mastercard charged a fee for each transaction, which became the focus of the legal case.
It was alleged that these fees were set too high, and although retailers paid them, they were passed on to customers through increased prices.
Former financial ombudsman Walter Merricks led the case, claiming that around 46 million UK shoppers were affected and effectively overcharged during the 15-year period. The lawsuit became one of the first of its kind under the Consumer Rights Act 2015, which introduced US-style class actions into UK competition law.
Following a year-long negotiation process over the settlement amount, the Competition Appeal Tribunal has now formally approved the settlement.
Who is eligible for the payout, and how can you apply?
Importantly, you do not need to have owned or used a Mastercard to qualify, however, there are a few other rules to meet.
Firstly, you must have lived in the UK for at least three months between 1992 and 2008, with the exact eligible time periods differing depending on where in the UK you lived.
People in England, Wales, and Northern Ireland must have lived there between June 1997 and June 2008. In Scotland, the eligibility period started from May 1992.
Secondly, you must have been over the age of 16 during those three months. This means anyone born on or after March 22, 1992, is not eligible to apply for the compensation.
You must also have lived in the UK on September 6, 2016, the date the legal claim was filed in the courts.
An online claims portal will launch “in the coming weeks” on the MastercardConsumerClaim.co.uk website.
Around £100million of the total settlement has been allocated for direct payments. If approximately 2.5 million people (about 5% of those eligible) make a claim, each could receive around £45. However, with fewer claims, the payout could rise to as much as £70 per person.
Calling the outcome “a fair and just result,” Mr Merricks said: “On any view, recovering £200 million by way of a settlement for UK consumers is a huge sum, and that will translate into a meaningful impact in the pockets of UK consumers.”
