GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?


Table of Contents

Lead Story

Turbulence expected for 1099-K reporting, be prepared

News

Industry Update

Washington takes a second look at Durbin

Big card brands, big banks hit with more antitrust suits

CEOs advise wait and see at ETA forum

Update feeds need for more PTS guidance

Features

Legislative update, November 2011

Five key lessons e-commerce merchants can learn from the 2010 holiday season

Michael Duffy
Chase Paymentech Solutions LLC

Research Rundown

Give, inspire and flourish

Selling Prepaid

Prepaid in brief

Union Privilege makes savings a plus

Holiday gift cards get personal

Views

ISOs and the new frontier of payments

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Agent training - more than taking a test

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

When big money meets small ISOs

Adam Atlas
Attorney at Law

Country-specific alternative payments

Caroline Hometh
RocketPay LLC

Visa to eliminate PCI DSS requirements with EMV - not

Linda Grimm
Linda Grimm Consulting

How does a credit card salesperson learn to sell POS?

Jerry Cibley
United Bank Card Inc.

PR and press release basics

Peggy Bekavac Olson
Strategic Marketing

Managing infrastructure in a virtual world

Tim Cranny
Panoptic Security Inc.

Caution: Assumptions ahead

Jeff Fortney
Clearent LLC

Company Profile

POS Portal Inc.

New Products

TIN matching simplified

TIN Matching Service
SecurityMetrics Inc.

Authenticate and process with one touch

OneTouch Mobile Payment
Admeris Payment Systems Inc.

Inspiration

Choose to be grateful

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

November 14, 2011  •  Issue 11:11:01

previous next

Big card brands, big banks hit with more antitrust suits

Visa Inc. and MasterCard Worldwide were recently hit by two new class action complaints alleging the companies fix ATM fees. These complaints came less than a week after the nac National ATM Council Inc. and more than a dozen independent ATM operators filed an antitrust lawsuit on the same grounds (see "NAC sues MasterCard, Visa alleging antitrust" posted Oct. 14, 2011, under Breaking News at www.greensheet.com/breakingnews.php?flag=breaking_news). All three suits were filed in the U.S. District Court for the District of Columbia.

The Bartron complaint

Lynne Bartron and Charles Brown et al. v. Visa Inc. et al. was filed Oct. 18, 2011, by Washington D.C. attorney John Kern on behalf all U.S. customers who have paid ATM fees on or after Oct. 1, 2007. Kern's firm was joined in bringing the suit by Hagens Berman Sobol Shapiro LLP and The Paynter Law Firm PLLC.

The plaintiffs in this case refer to themselves as "indirect purchasers" and ask the court to certify 50 indirect purchaser subclasses - one for each U.S. state. Otherwise this complaint resembles the one filed in The National ATM Council Inc. et al., v. Visa Inc., et al. on Oct. 12. Both complaints allege the card companies' ATM fees suppress competition and illegally prohibit discounts for transactions that don't use the Visa or MasterCard networks.

"The violation in this case is a horizontal agreement among every bank that issues Visa- or MasterCard-branded payment cards - including every principal U.S. bank - organized and supervised by the defendants as ringleaders and enforcers for the purpose of fixing the surcharge that consumers pay for ATM services," the Bartron complaint states.

The complaint also asserts, "While couched in terms of a ceiling on ATM access fees, the ATM restraints actually operate to prohibit discounting by competing ATM operators. The 'ceiling' price is the 'floor' price due to the ATM restraints."

The plaintiffs believe other ATM networks should be able to introduce lower-cost PIN-based transactions or offer rebates but are prohibited from doing so by the card companies. "The ATM restraints put a competitive straightjacket on ATM operators and injure plaintiffs," the complaint alleges.

The Bartron lawsuit asks the court to certify the complaint as a class action; declare the imposition of ATM fees to be a restraint of trade in violation of the Sherman Antitrust Act; issue an injunction requiring the card companies to eliminate the ATM restraints; forbid the card companies from fixing or specifying access fees for ATM transactions; issue an order against the card companies prohibiting or preventing cardholders from choosing to use an alternate network; make the card companies "fund programs to inform consumers and ATM operators of their right to choose network routing"; and award treble damages for each member of the class.

The Genese complaint

The second new complaint, Justin Genese v. Visa Inc. et al., alleges the two card companies illegally conspired with three major banks - and the companies processing merchant transactions for those banks - to fix prices for "foreign" ATM access fees.

A foreign ATM transaction occurs when a customer of one bank withdraws money from his or her account using an ATM owned or operated by another bank. In a foreign transaction, the customer pays the ATM operator for use of the ATM, and the operator pays its bank a foreign ATM fee.

The Genese lawsuit was filed Oct. 18, 2011, by Craig Brikin of Mehri & Skalet PLLC and Labaton Sucharow LLP. The action names Bank of America N.A., BA Merchant Services LLC, JPMorgan Chase & Co., Chase Paymentech Solutions LLC, and Wells Fargo & Co. as defendants in addition to Visa and MasterCard.

The complaint alleges the banks joined in a conspiracy with the card companies to fix ATM access fees. It asks for certification as a class action; a finding that the defendants are in violation of the Sherman Antitrust Act; an injunction requiring the card companies and the banks to eliminate the ATM restraints; an injunction prohibiting the defendants from fixing ATM access fees for ATM services; and treble damages and costs.

Defendant responses

MasterCard spokesman Seth Eisen responded to a request for comment saying, "The claims challenging certain MasterCard ATM rules are without merit. These rules were put in place to protect consumers from ATM operators seeking to impose discriminatory surcharges on our cardholders. We believe these important consumer protections must be preserved and we will vigorously defend against the claims brought against us."

Regarding this suit, Lisa Westermann, Wells Fargo Assistant Vice President Public Relations, said, "We believe the allegations of the complaint are without merit and plan to vigorously defend the case." A spokesman from BofA declined to comment. Neither Visa nor JPMorgan Chase responded to a request for comment.

For additional news stories, please visit www.greensheet.com and click on "Read the Entire Story" in the center column below the latest news story excerpt. This will take you to the full text of that story, followed by all other news stories posted online.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | USAePay | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems