Millions of UK shoppers could soon be eligible to receive compensation of up to £70 each following the final approval of a major class action settlement against Mastercard. A long-running legal battle, which originated almost a decade ago, has concluded with a tribunal approving a £200 million payout, acknowledging that consumers were likely overcharged due to historic fees levied by Mastercard on businesses.
Led by former financial ombudsman Walter Merricks, the lawsuit argued that “multilateral interchange fees” charged by Mastercard to retailers between 1992 and 2008 were unlawfully high and breached competition law. While businesses directly paid these fees, the claim asserted that these costs were ultimately passed on to shoppers through higher prices for goods and services purchased from UK businesses during that 15-year period.
Why is Mastercard Paying Compensation?
The roots of the case trace back to a 2007 ruling by the European Commission, which found that Mastercard’s fees infringed competition law. The subsequent UK class action, made possible under the Consumer Rights Act 2015, sought to recover the losses consumers suffered from these allegedly inflated prices.
Walter Merricks pursued the case on behalf of an estimated 46 million British shoppers, arguing that virtually all consumers lost out by paying more than they should have. The Competition Appeal Tribunal has now given final approval to a settlement figure of £200 million, making this one of the UK’s largest group litigation settlements to date.
Who is Eligible to Claim Mastercard Compensation?
A significant aspect of this settlement is that you do not need to have owned a Mastercard credit card yourself at any point to be eligible for compensation. Eligibility is based on having potentially paid higher prices indirectly.
You are likely eligible to claim compensation if you:
Lived in the UK (England, Wales, Scotland, or Northern Ireland) for at least three months during the period relevant to your region.
Bought goods or services from UK businesses that accepted Mastercard credit cards between May 1992 and June 2008 (for Scotland residents) or June 1997 and June 2008 (for residents of England, Wales, and Northern Ireland).
Essentially, if you were a UK resident shopper during those years and bought items from retailers that accepted Mastercard, you could be entitled to a payout.
How Much Could You Receive?
The total settlement figure is £200 million. Of this, £100 million has been specifically ringfenced for eligible consumers who come forward to claim.
The exact amount per individual claimant depends on the total number of valid claims received:
If approximately 2.5 million people (around 5% of the estimated affected group) claim, each person would receive roughly £45.
If fewer people claim, the individual payment amount will increase, capped at a maximum of £70 per eligible person.
While the settlement is considerably less than the initial claim (which was reported to be over £10 billion), Mr. Merricks has described the approved £200 million as a “fair and just outcome” and a “huge sum” that will have a “meaningful impact” for consumers.
How to Claim Your Mastercard Payout
The process for claiming is intended to be straightforward. Walter Merricks has stated that consumers will soon be able to register to receive their payout via a simple online form. There will be no requirement to provide proof of having used a Mastercard yourself when submitting your claim.
Consumers must register their claim by the deadline, which is set for the end of the current year (2024). Payouts to successful claimants are currently anticipated to begin before the end of 2025.
Challenges and Unclaimed Funds
Despite the simplified process, concerns remain about consumer awareness and participation. Recent research suggests many people are confused about collective claims and might be reluctant to apply for smaller compensation amounts or find the process too complicated.
Any money from the £100 million consumer fund that remains unclaimed after the deadline will not revert to Mastercard or the initial litigation funder that backed the lawsuit. The Competition Appeal Tribunal has ruled that these unclaimed funds should be directed to the Access to Justice Foundation, a charity dedicated to improving access to legal help for disadvantaged consumers.
This landmark case is seen as an important test for the UK’s class action framework, demonstrating its potential to deliver redress for consumers even in complex, long-running disputes over historic competition infringements. Keep an eye out for further announcements regarding the online registration portal opening soon.
References
- https://www.bbc.com/news/articles/c14kkjyrk20o
- https://www.bbc.co.uk/news/articles/c14kkjyrk20o
- https://consumervoice.uk/money/millions-of-consumers-could-get-up-to-70-each-as-court-confirms-200-million-mastercard-payout/
- https://www.the-independent.com/money/mastercard-compensation-claim-pay-out-lawsuit-ruling-b2754520.html
- https://feeds.bbci.co.uk/news/articles/c14kkjyrk20o
