(WJET/WFXP) — Visa and Mastercard have agreed to pay $197.5 million to resolve a class action lawsuit that accused the companies of keeping ATM fees high.
The preliminary approval was submitted to the Washington DC District Court on May 29 and is currently awaiting court approval. The settlement involves any person who withdrew money from a bank-operated ATM and had to pay a fee to withdraw the cash in the United States at any time from October 1, 2007.
According to court documents, the proposed settlement class is estimated to have at least 175 million members. If the deal is accepted by the court, over 100 million notices will be sent out via email, as well as targeted advertisements placed on websites and applications.
According to Reuters, this settlement comes after the court turned down an appeal by Visa and Mastercard over a lower court’s ruling to allow three plaintiffs to band together to sue as a class action. The companies argued that the judge had failed to perform a “rigorous analysis” before certifying the class action lawsuits.
The settlement documents state that Visa will pay $105.7 million and Mastercard will pay $92.8 million for the settlement. This document also notes that there are two related lawsuits in the same court: one is from customers who used non-bank ATMs and the other is for businesses who own an independent ATM.
This settlement comes a few months after Visa and Mastercard were involved in a long-running antitrust suit over the fees charged every time a credit or debit card is used in a store or restaurant. According to the settlement announced Tuesday, Visa and Mastercard will cap the credit interchange fees until 2030, and the companies must negotiate the fees with merchant-buying groups.
The settlement is in addition to a 2023 financial $5.54 billion settlement between Visa and Mastercard and 18 million businesses that accepted Visa or Mastercard during a 15-year period up to January 25, 2019. Eligible merchants who received a claim form in the mail in December and January can claim a share of that settlement. An extension order for claims was granted for this suit extending the deadline to August 30, 2024.
The Associated Press contributed to this report.