The National Association of College Stores (NACS) on May 24 submitted its opt-out notification and objection filing to the proposed credit card swipe-fee settlement with the court overseeing the case. Members of the merchant class had until May 28 to announce their decision to opt out or object to the proposed settlement.
The proposed settlement stems from lawsuits challenging the interchange fee practices of Visa and MasterCard and is pending before the U.S. District Court, Eastern District of New York (“In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation”). In November 2012, NACS joined a majority of named class plaintiffs and nearly 1,200 others urging the court to deny preliminary approval to a proposed settlement. Its Board of Trustees voted April 2, 2013 without dissent to object and opt out of the settlement.
By opting-out and objecting, NACS not only registers its opposition to the terms of the deal, but also rejects the financial reward available under terms of the proposed settlement.
“The NACS Board decided that rather than reforming the anticompetitive and illegal practices engaged in by the credit card industry, the settlement allows that industry to continue to take advantage of merchants and their customers while blocking competition and choice,” said NACS Vice President of Government Relations Richard Hershman.
In NACS’ objections it stated “that the proposed settlement does not address the core claims in the case: Visa’s and MasterCard’s price-fixing of interchange rates. The proposed settlement instead validates and protects that practice, enabling Visa and MasterCard to continue to illegally fix fees for the banks that merchants and their customers have no choice but to pay. Excessive swipe fees that would otherwise be returned to students through lower prices, grant aid, and improved student services are being misdirected toward credit card companies at a time when students are struggling to afford college”
NACS also strongly objected to the principal proposed relief of allowing merchants to surcharge customers, stating that such an approach is of virtually no value to NACS or its members. “NACS and its members are in the business of reducing costs for cash-strapped students and their parents, particularly for required academic course materials.”
For these reasons, NACS has worked for more than seven years to reform excessive and unfair swipe fees, which are dictated by the dominant credit card companies, and remain a debilitating cost to nonprofits and small merchants, such as college stores. The inability to negotiate lower charges – or even know with certainty what those fees will be each month – is a harmful on the work of nonprofits and small businesses and an unnecessary added cost to students.
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