The National Retail Federation (NRF) asked a federal judge to “right or reject” a proposed settlement of an antitrust lawsuit over credit card swipe fees, saying the measure needs to be rewritten to do more to bring the soaring fees under control and that retailers who don’t support it should be allowed to completely opt out, according to the press release.
Attorneys representing NRF are scheduled to appear before U.S. District Court Judge John Gleeson in Brooklyn, N.Y. on September 12 for a hearing on final approval of the settlement. NRF opposes the settlement because it fails to reform the price-fixing system under which Visa and MasterCard set swipe fees followed by banks that issue their credit cards, or to introduce transparency that would lead to competition to lower the fees. Rather than lowering the fees, the card companies have proposed passing them along to consumers as a surcharge, even though most major retailers have rejected surcharges and at least 10 states bar surcharges by law. The $7.25 billion settlement was intended to compensate retailers for price-fixing over nearly nine years but amounts to less than three months’ worth of swipe fee charges, and small retailers would receive as little as a few hundred dollars.
Averaging about 2 percent, swipe fees are a percentage of the transaction taken by banks each time consumers swipe a credit card to pay for a purchase, and total about $30 billion a year nationwide. The fees have tripled over the past decade and drive prices up for the average household by more than $250 per year. Full story.