If your Business or Organization accepted Visa or MasterCard for any portion of any year, or any inclusive year during the whole calendar periods of January 1, 2004 to January 25, 2019, inclusive, you are likely to be entitled to file a claim as part of an ongoing Class Action Suit filed about fifteen (15) years ago that can result in obtaining refunds that the Court determines may have been Merchant fee credit card overcharges. The Court established a website to provide all the information in regards to the Anti-Trust Lawsuit. It can be accessed by going to PaymentCardSettlement.com. It is important to note that the Owners of any Business that was sold during the 2004-2019 calendar years that accepted Credit Cards can now file a Claim if they sold their Company as an Asset Sale versus a Stock Sale. And, any Business that went Bankrupt during this period may also file a Claim, if they meet that Asset vs Stock Sale threshold.
As background, about fifteen (15) years ago, a group of Retailers filed an Anti-Trust Case against Visa and MasterCard. In simple terms, the Case obtained Preliminary approval to be settled. And, a hearing was conducted on the proposed settlement on November 7th, 2019. The hearing on November 7th was dubbed as a Fairness Hearing. At that time, both the Claimants, and Defendants alike from the original Class Action Suit which is detailed at the web site of PaymentCardSettlement.com communicated to the Judge any info they wanted to add, before she makes her ruling. The timeline for her ruling itself does not have a calendar date attached to it. So, her ruling may be made in months or years, depending on the issues she has to take into consideration.
During the past twenty five (25) years, I have run my own business. About a half dozen years ago, I had to get a Merchant Account to be able to process Visa and MasterCard, because some business colleagues wanted me to produce an affinity group symposium that required me to procure lodging and meeting space and ground transportation in addition to provide onsite meeting planning and staffing of the event. As my last business which I sold in 1994 was in the hospitality business, this was familiar territory for me. The point of sharing this is that my Company itself is eligible to file a Claim with the Court through their Third Party Administrator.
After reviewing the information, because our Company was eligible itself for a Refund, So, I called the toll-free Contact Number of the Third Party Administrator who can be reached at 1-800-625-6440. And, asked them what I needed to do in order for me to file a Claim. They instructed me to provide them with the usual Company information, as well as my Federal Taxpayer Identification Number, which I did. They then told me that I would be receiving further information in the mail. To this date, the Judge has not made any ruling.
However, the danger of a Class Action Settlement Case is that even when a judgment is issued, the amount of money that each Claimant can receive can be a pittance in relationship to the amount that they would envision that they would receive. This weekend my wife and I went to see a new Movie entitled Dark Waters starring Mark Ruffalo. Regardless of this article, it is an important movie, as without giving anything away has a direct effect on any reader of this article. One parameter of the movie focuses on the futility of Class Action Lawsuits.
There is a great website on Class Action Lawsuits located at ClassAction.org. In reviewing a couple of blog posts, I learned that the Claimants of a Class Action lawsuit against Dial Soap because Dial claimed that is soap killed 99% of germs, when it actually did not work better than regular soap and water took years and years won a judgment that was capped at an award of 27 cents per bottle of Dial Soap with a maximum of 30 Bottles for a grand sum of $6.40. In the case of the Exxon Valdez oil spill case, that Class Action Lawsuit dragged on for over twenty (20) years.
While ClassAction.org cites that a typical Class Action Suit takes 2-3 years, the Claimants for this pending Credit Card Processing Fee settlement case are currently in never-never land, where they may never-never get paid anything because the Case continues to be up in the air. Is there an option available for Businesses and Organizations that would like to sell their pending refund? It is possible. Why in the World would anyone want to buy a pending refund on a Class Action Suit? The answers may surprise you.
There are Global Financial groups that have investors that are looking to place their monies in investment opportunities that are alternatives to standard interest rate accruals that Banks generally yield. Investopedia has a good article entitled How Negative Investment Rates Work which provides a good overview of European investors (see https://www.investopedia.com/articles/investing/070915/how-negative-interest-rates-work.asp, So, buying positions in a future long-term investment can make economic sense to some investment groups, such as those based in Europe.
So, because the Court recognized that some Medium and Large Companies are not going to want to wait years and years to get an undetermined amount of money, because there are so many variables that effect the actual payment of Claims in a Class Action Lawsuit, the Court actually recognized that it is okay for anyone who accepted Credit Cards during the 2004-2019 calendar years to be able to sell their position in their Claim. And, stipulated as such, per the info on the paymentcardsettlement.com website.
So, in general terms, if a Business or Organization has processed $250 million dollars or more in gross Credit Card processing sales over a 15-year period, which is only just over $1.3 million per month, which is an amount generated by any decent size restaurant, would likely be in a position to be able to sell their future Claim position in the Credit Card Refund Settlement. And, to do so, they would simply have to provide the prospective buyers verification in the form of as much prior credit card processing statements, or accounting or bookkeeping statements, and general ledger line items in regards to credit card processing that they filed on their tax returns. In other words, as in any business transaction where you have a Buyer and a Seller, the Buyer wants to have verification of what they are purchasing! Let me continue.
In my own review and personal opinion of the Third Party Administrator, the estimated number of Claimants for this Class Action Suit are over 7 million. Common sense dictates that before any Claimant can be paid, it is going to take years and years for the Third Party Administrator to confirm what each Claimant was paying in Credit Card Processing Fees, because unlike Dial Soap, where you had a relatively defined price, in the case of Credit Card processing fees, it is disparate. Card-Not-Present Merchants routinely pay less than Retailers. While a group of Retailers filed the initial Claim, the Court is going to adjudicate the entire Class. This brings me back to the Dark Hours Movie (Spoiler Alert!). At one point in the Movie in regards to a Case that had dragged on for decades to a few years ago, the Judge quips that the Class Action Suit could go on for hundreds of Years. My point is that even when the Judge issues a ruling, my personal opinion is that the number of Employees of the Third Party Administrator will not be able to pour over each individual Claim in regards to the fees that they paid versus other Merchants. Additionally, the number of very large Merchants, such as Airlines and Utilities are each going to have the weighted dollar volume processing of thousands and thousands of Smaller Merchants.
The bottom line is that there are some Businesses and Organizations who do get offers from financial entities who wish to purchase their future Credit Card Refund Claim. And, those who avail themselves of opting for that opportunity may subscribe to the old adage, “A bird in the hand is worth two in the bush.”