Foreign Currency Conversion

Recovering your overcharges: Priceless

September 20, 2006

A nationwide settlement agreement has been reached in a consolidated federal class action lawsuit regarding how credit card companies calculate foreign transactions.

The lawsuit concerns the fees that cardholders of Visa- and MasterCard-branded credit and debit/ATM cards, as well as Diners Club cards, have been charged to make transactions denominated in a foreign currency or with a foreign merchant. The plaintiffs claimed that the defendants violated federal and state antitrust laws, disclosure laws, and other legal requirements by adding an undisclosed surcharge to each transaction.

Under the settlement, defendants will pay $336 million to create a settlement fund to pay monetary claims eligible to cardholders, the costs of administering the settlement and notice to cardholders, and any court-approved fees and expenses to attorneys for the class and awards to the class representatives. The settlement also includes provisions relating to disclosures on billing statements and other documents.

Defendants in the case include Visa, MasterCard, Bank of America, Bank One/First USA, Chase, Citibank, Diners Club, HSBC/Household, MBNA and Washington Mutual/Providian. Card accounts covered by the settlement include brands such as Visa, Interlink, Plus, MasterCard, Cirrus, and Maestro.

The settlement documents also include agreements to settle certain related lawsuits, including Schwartz v. Visa, No. 822404-4 (Cal. Super. Ct., Alameda County). If this settlement is approved, claims in those and other related lawsuits will be extinguished.  The settlement agreement awaits approval by the Southern District Court of New York.

In re Foreign Currency Conversion Fee Antitrust Litig., MDL No. 1409 (S.D.N.Y.).

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