Dive Brief:

• Communication regarding problematic merchant claims arising from a $5.5 billion card fee lawsuit settlement with Visa and Mastercard has declined, following the February deadline for businesses to file for compensation, lawyers for the merchant plaintiffs told a federal court Friday.
• The claims administrator, Epiq Systems, has clients’ lists from 685 third-party claim filers that purport to represent at least 10 claimants, according to the class counsel’s 19th monthly report to the court. Those third parties say they represent 991,665 tax identification numbers, the report said.
• Neither the plaintiffs' attorneys nor Epiq have said when merchants can expect to see payment from their claims. The class counsel recommend checking the settlement’s official website periodically for updates. Epiq is also sending notifications and requests to merchants via email.

Dive Insight:

The $5.5 billion settlement partially resolved a long-running antitrust case in which card network giants Visa and Mastercard were alleged to have overcharged merchants by imposing excessive interchange fees, often known as swipe fees.

The class includes any U.S. business that accepted Visa or Mastercard credit or debit cards between Jan. 1, 2004 and Jan. 25, 2019. The deadline to file a claim was Feb. 4; claim notification forms were sent to about 18.6 million U.S. merchants.

The claims “process is progressing as expected,” a spokesperson for the class counsel’s public relations firm, Wright On Communications, said in a May 9 email.

The process has been marred periodically by fraudulent, incomplete or noncompliant claims, many of them solicited by third parties.

Class lawyers have repeatedly asked the court to address various issues with third-party filers, which offer to file a claim for merchants in exchange for a percentage of their recovery.

Last month, U.S. Magistrate James Marutollo held a conference call to hear evidence about a third party filer called Pacific Travel and Services, which allegedly took money from 80 class members, many of them small businesses, to help process their claims. Pacific Travel’s fees to the merchants were not based on their expected recovery, according to court filings.

Marutollo recommended that the U.S. District Court in Brooklyn, New York require repayment of the funds and for Pacific Travel to send all 80 class members letters in English and Vietnamese explaining that Epiq will assist class members at no cost and that Pacific Travel lacked the authority to file claims. 

In July, law firm Milberg Coleman Bryson Phillips Grossman agreed to pay $25,000 to the claims administrator for filing more than 115 fraudulent documents in which it claimed to represent businesses seeking part of the settlement. The firm said a “problematic third-party referral source” was to blame for the fraudulent filings.

Lawyers for the merchants didn't respond to a question asking for an update on the number of claims submitted. There were 18.6 million forms sent to potential plaintiffs in 2023.

Third-party filers can help to increase the number of claims filed in a class-action. They are allowed to operate if they are not misleading class members, Payments Dive reported in May 2024.