Minneapolis, MN. June 23--A law firm representing a group of small businesses around the country on Thursday said it has filed a lawsuit against the nation's biggest banks charging them with illegally fixing prices of credit card transaction fees.
The lawsuit, filed in the U.S. District Court for the District of Connecticut, charges Visa, MasterCard, Bank of America, Citibank, JPMorgan Chase and other leading banks with setting "exorbitant" interchange fees, which banks charge merchants every time a customer makes a purchase using a MasterCard or Visa card. The Wall Street Journal first reported details of the lawsuit in its Thursday editions.
Many businesses have argued that banks, acting with Visa and MasterCard, are illegally fixing prices on interchange fees. Wal-Mart Stores Inc., the world's largest retailer, negotiated a settlement with Visa and MasterCard valued at more than $1 billion. Other retailers like Home Depot Inc., Best Buy Co. and others have either won fee cuts or are in talks to do so, according to the Journal.
Representatives at the banks named in the suit were not immediately available to comment.
The law firm bringing the suit, Robins, Kaplan, Miller & Ciresi L.L.P, said interchange fees represent a hidden tax that raise prices on most products people buy.
"The card issuing banks that control Visa and MasterCard have the ability to set the interchange fees as high as they want, without any market force to restrain them," the firm said, adding that it seeks relief to stop the alleged anticompetitive behavior plus damages.
