During the last few weeks, while you have been working through your re-openings from the pandemic and stay-at-home orders, you may have received a notice regarding a class action involving merchants that accept Mastercard and Visa.
If you are a merchant that accepted either Visa or Mastercard between January 1, 2004 and January 25, 2019, you might be owed money from a recent 5.54 billion-dollar class action settlement. On December 13, 2019, the United States District Court for the Eastern District of New York entered its Final Approval Order on the case which entitles any merchants who accepted these cards during that period to receive a recovery based on the fees they paid to use the credit and debit cards. As a self storage operator using credit card processing for payment, it is likely that you are eligible to be a member of this settlement class.
The lawsuit involved the "interchange fees" charged to merchants that accepted Visa or Mastercard credit or debit cards between January 1, 2004 and January 25, 2019. Interchange fees are the fees charged to merchants for processing the credit or debit card transactions, which are typically 1-2% of the purchase price. The claim was that Visa and Mastercard violated federal antitrust laws when they charged these interchange fees.
Currently the case is under appeal. Once the appeals process is complete, the court will then finalize a claim form and set a deadline for members of the settlement class to submit claims. In order to receive a payment under the settlement, merchants affected will be required to submit this specified claim form. The information submitted under the claim form will include the interchange fees that were paid to the credit card companies from January 1, 2004 through January 25, 2019, the class member's merchant category code (or business description) and the total Visa and Mastercard transaction volume incurred during the same period.
The amount paid from the settlement fund will be based on this claim data submitted by the business. Ultimately, the amount of money each approved claimant will receive will depend on the total dollar value of all valid claims made against the pool of money available to pay those claims (subject to the costs of the class action, payment of the attorneys' fees and expenses and money awarded to the class plaintiffs who initially brought the lawsuit).
The settlement program does permit third party collection services to assist class members with their claim applications. But all such third party services are required to clarify in their solicitations the following information: 1) A statement that claim forms are not yet available; 2) A statement making clear that class members need not sign up for a third-party service in order to participate in any monetary relief (and explaining that no-cost assistance will be available from the Class Administrator and Class Counsel during the claims-filing period); and 3) Information directing class members to visit the Court-approved website (www.PaymentCardSettlement.com) for more information.
What is important to know now is that this settlement is out there. You should be talking with your merchant services provider about the possibility of preparing a claim and how they can help. At some point, when the appeal is finalized and the claim period begins, you might be entitled to money from this five billion-dollar pool of funds. But you can only be paid if you submit a claim!
Should you have any questions on operating your business during this unprecedented time, please do not hesitate to contact Weissmann Zucker Euster Morochnik & Garber P.C.
Thumbnail: Photo by YTCount on Unsplash
Pros and Cons of Self Storage SBA Loans vs. Traditional Loans
Decide wisely between SBA and traditional loans for your self-storage business. SBA offers lower down payments, but traditional loans provide lender reliability. Make informed investment choices for your storage facility.