isa and MasterCard are in the hot seat again. The associations might have to refund $500 million to consumers for not properly disclosing currency-conversion fees charged on purchases made abroad or on foreign-based Web sites using Visa- and MasterCard-branded credit cards.

California State Court Judge Ronald M. Sabraw's preliminary ruling on a lawsuit against Visa International, Visa USA Inc. and MasterCard International is sealed, but the Wall Street Journal reported the judge sided with the plaintiff's claim that Visa and MasterCard should have required their card issuers to clearly divulge fees charged for currency conversion.

The judge didn't prohibit charging the fees but did say that Visa and MasterCard should refund the cardholders and in the future require their member banks to clearly show the surcharges on statements.

When a cardholder makes a purchase overseas, Visa or MasterCard charge an exchange rate plus 1% to their member banks. The banks pass that charge on to cardholders, and many of them add on additional fees of their own, ranging from 2% to 4%.

The complaint is that many of these banks do not disclose fees they charge for the currency conversion beyond the agreement the cardholder receives in the mail with a new card.

On their monthly statements, many cardholders just see a comparison of the amount owed in foreign currency and that figure converted into local currency.

Visa might face the brunt of the California state judge's decision. Because Visa International's headquarters are in Foster City, Calif., Visa would be required to refund money to all of its cardholders nationwide, while MasterCard only would be required to reimburse cardholders residing in California. The banks that own and fund the associations might have to pay some of the money, too.

Judge Sabraw did not state an exact number Visa and MasterCard would have to pay, but the plaintiff's attorneys, Milberg Weiss Bershad Hynes & Lerach LLP, estimated that $500 million represents five years of conversion fees from 1996. The judge is expected to make a final decision soon based on review of responses to his initial ruling.