In what might be majorly unsettling to credit card companies, large retailers have reportedly sued card processors.
The country’s biggest retailers, including Target Corp. and Macy’s Inc, have filed a complaint against card processing companies MasterCard and Visa. The claim rests on alleged fee fixing and rejects a settlement reached last year over the same issue.
It should be remembered that in 2005, around 19 trade associations as well as retail companies had filed a suit against the card processing companies as well. The charge was the same – card processing companies had conspired to fix the fees they will charge stores for any payment done with credit cards.
Last July, a $7.2 Billion settlement was reached, but even then, some of the retailers weren’t happy. The unhappiness stemmed from a clause in the agreement, which stated that retailers couldn’t bring out future lawsuits against card processing companies over swipe fees. Also, some other retailers contended that the settlement amount was much lesser than what the deserved and what they would have eventually won in a fair trial.
At the beginning of this week, the National Retail Federation too urged its members to reject the settkement, because of the particular clause which barred future lawsuits. The National Retail Federation commands the representation of over 9,000 retailers in the country and thus it is no surprise as to the latest developments.
The retailers in the new lawsuit are Mass.-based TJX Cos., Framingham, Office Kohl’s Corp., Abercrombie & Fitch Co., Depot Inc., and many others. The lawsuit has been filed in the US District Court in Manhattan.