Retailers nix settlement, sue credit card firms
NEW YORK — Some of the country's largest retailers, including Target Corp. and Macy's Inc., on Thursday filed a lawsuit against MasterCard and Visa, rejecting a settlement reached last year over alleged fee-fixing.
A larger group of 19 trade associations and retail companies originally filed suit against the card processing companies in 2005, claiming they conspired to fix the fees they charge stores for handling payments made with credit cards.
A $7.2 billion settlement was reached in July, but some of the retailers rejected it, partially because it includes a provision barring retailers from filing future lawsuits over swipe fees. Some retailers have argued that the settlement amount was far less than what they deserved and might have won at trial.
Earlier this week, the National Retail Federation, which represents more than 9,000 retailers across the country, urged its members to reject the settlement.
The retailers involved in the new lawsuit, filed in U.S. District Court in Manhattan, also include TJX Cos., Office Depot Inc., Kohl's Corp., Abercrombie & Fitch Co. and several others.
Visa spokesman Will Valentine declined to comment, while MasterCard spokesman Jim Issokson would say only that his company remains confident that the settlement will ultimately be approved.
Trish Wexler, a spokeswoman for the Electronic Payments Coalition, which counts the companies among its members, said the lawsuit didn't come as a surprise and was the next natural step for retailers opting out of the settlement.
Other retailers have until Tuesday to opt out of the agreement so they can pursue their own legal action.
Visa shares fell $2.04 to $178.10 on Thursday; MasterCard shares fell $6.98 to $569.73.