In a landmark decision for UK consumers, Mastercard has agreed to a £200 million settlement to resolve a collective lawsuit over excessive fees charged on transactions. This case, which has spanned nearly a decade, shines a spotlight on the power of collective legal action and what it means for consumers seeking financial justice.
With up to 46 million adults potentially affected, the settlement represents not just compensation but also a major win for consumer rights.
Background of the case
The case began with allegations that Mastercard charged excessive interchange fees on transactions, costs that were ultimately passed on to consumers through higher prices for goods and services.
Think of it like this: You’re buying your weekly groceries. You’ve done your research and compared prices. But buried within that cost is a hidden fee – one you never agreed to – that had been quietly inflating prices for years. That’s exactly what lawyers claim happened with Mastercard’s excessive interchange fees. While consumers weren’t aware, these hidden costs were built into the prices of everyday purchases, leaving millions paying more than they should have. And here’s the kicker: even if you never used a Mastercard, you still ended up paying more because of the inflated prices.
Millions of consumers were affected by Mastercard’s practices, sparking a large-scale collective lawsuit aimed at holding the company accountable. Initially approved in 2021, the case became the first mass consumer action to be approved in the UK under the Consumer Rights Act 2015, which paved the way for collective claims to proceed more effectively.
Details of the settlement
In December 2024, Mastercard agreed to a £200 million settlement to resolve the class-action lawsuit. This landmark agreement means consumers – who may not have even been aware of the fees – could benefit from compensation. While the exact payout is still being finalised, those who participated in the claim are expected to receive approximately £40 to £50 each.
Walter Merricks CBE, who is the ‘class representative’* for the claim said:
“I am very pleased that after nearly nine years of litigation with Mastercard, I have agreed to a settlement that I believe will deliver meaningful compensation to class members who chose to come forward to participate in the distribution of the damages”.
While this is a significant achievement, some legal experts have criticised the delay in justice, pointing out that the case has taken over eight years to resolve.
*JARGON BUSTER: In the UK, a class representative is an individual who brings a claim on behalf of a group of people who share a common interest in the case.
Significance for consumer rights
The Mastercard class action settlement is more than just a financial win – it reinforces the principle that corporations must prioritise fair practices. By challenging a major business like Mastercard, this case demonstrates that no organisation is untouchable. It’s a powerful reminder that consumers have the right to stand up for fairness and win.
Precedent for future cases
The Mastercard class action settlement also sets a clear precedent for future group claims in the UK. Historically, collective actions were far more common in the US, but this case proves they are gaining traction here too.
For companies, it serves as a warning: unfair practices will be scrutinised, and compensation may be required. For consumers, it’s an empowering shift, showing that when people stand together, change happens.
What consumers can learn
- Stay informed: Keep an eye on news about collective claims that might affect you. You can find claims to join here.
- Know your rights: If you suspect unfair fees or practices, you could be eligible for compensation.
- Take action: Participate in group claims or class actions when you can. Collective efforts often lead to greater impact.
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