Matthews filed a proposed national class action in the British
Columbia Supreme Court against Visa, MasterCard, and several leading
banks. The claim alleges that the credit card giants and banks have
engaged in a multi-billion dollar price fixing conspiracy to increase
or maintain the fees paid by merchants on every credit card
When a customer pays with a credit card, Visa and MasterCard take a
percentage fee, along with the card-issuing bank and the company that
processes the payment. That percentage varies depending on what kind
of card is used. Basic cards charge a smaller percentage, while
premium credit cards that offer points and other rewards cost
merchants a much higher fee.
The claim alleges that Visa and MasterCard rules force merchants to
accept every Visa or MasterCard credit card, even if those cards carry
high fees for the merchant. The claim also alleges that these rules
prevent merchants from charging more for payments with premium cards.
Ward Branch, partner at Branch MacMaster LLP said, "The lawsuit
alleges that merchants are forced to raise prices for all customers to
cover the cost of transactions with premium cards. Our research
suggests that these fees cost Canadian merchants $5 billion in 2009
alone. The system is bad for Canadian merchants, Canadian consumers,
and for the Canadian economy as a whole."
The suit follows a filing by the Competition Bureau of Canada, which
seeks to prevent Visa and MasterCard from imposing the rules
preventing surcharges and forcing merchants to honour all cards. This
proposed class action seeks to recover the fees that Visa, MasterCard,
and the banks are alleged to have collected illegally from merchants.
Along with Visa and MasterCard, the suit names BMO Financial Group,
Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Desjardins,
National Bank of Canada, Royal Bank of Canada, Toronto-Dominion Bank,
Bank of America, Capital One, and Citygroup Inc. as defendants.