$336M Settlement OK'd in Credit Card Currency-Fee Suits

Visa, MasterCard and several banks will pay $336 million to settle an antitrust suit in New York federal court that alleged they overcharged for transactions involving foreign-currency conversions.

The credit card companies and card-issuing banks, including Bank of America, also agreed to provide better disclosures of conversion rates and fees and to itemize the charges on card statements.

U.S. District Judge William H. Pauley of the Southern District of New York granted final approval of the settlement in the nearly nine-year-old case Oct. 22, determining that the agreement was fair.

The $336 million includes $54 million in attorney fees and expenses and covers more than 40 federal and state court suits. Nearly 40 million settlement notices have been sent out, and more than 10 million claims have already been filed.

The settlement class consists of all holders of U.S.-issued Visa and MasterCard credit cards, Diners Club cards and debit cards who made transactions involving foreign currencies between 1996 and 2006.

The suits, first filed in February 2001, alleged that the card companies and banks conspired, in violation of antitrust and lending laws, to overcharge customers for foreign-currency transactions.

The card companies charge a currency conversion fee of up to 3 percent of a purchase amount. The suits alleged that consumers were assessed a fee even when no currency was converted or exchanged.

The defendants failed to disclose the fees on card applications and monthly statements, the suits said.

Because of the complex nature of antitrust litigation and the fact that the case was likely to continue with discovery and appeals for years to come, Judge Pauley said, the settlement is appropriate.

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