Mastercard in $17Bn Fee Lawsuit, Accused of Preying on Millions

Mastercard Inc. preyed on more than 46 million unknowing consumers by unfairly charging card fees over a 16-year period, lawyers seeking to bring a 14 billion-pound ($17.2 billion) class-action lawsuit told a London court, according to Bloomberg report.

The credit-card company infringed European Union competition law by imposing high charges to retailers that accepted its cards between 1992 and 2008, Paul Harris, a lawyer for consumers, told the Competition Appeal Tribunal.

Locally, Nigeria CommunicationsWeek recalled that in 2013, Mastercard also received oppositions from IT experts in Nigeria for its involvement in the national identity card management.

Institute of Software Practitioners of Nigeria (ISPON) berated the Federal Government of Nigeria over the agreement, and disassociated itself from the project, saying the partnership with MasterCard contravenes global guideline and standard.

Chris Uwaje, president (now former), ISPON, said that the United Nations guidelines on the implementation of projects like national ID (that has to do with national security) stipulate that the scheme should be executed with open source software with indigenous people as primers.

“In the case of the national identity card project, none of the ISPON members were contacted neither is any indigenous firm involved in the implementation. We are not aware of any indigenous company working with them.” He said.

Engr. Lanre Ajayi, erstwhile president, Association of Telecommunications Companies of Nigeria (ATCON), said that the project should be stopped because trusting information about Nigerians in the hands of foreigners is a security risk.

According to him the involvement of a foreign company in the scheme is not in the interest of the country.

“The right thing would have been for the National Identity Management Commission to assemble Nigeria professionals, empower them and mandate them to implement the project;  by this our confidential data will be secured, that will also bring about development to the country” Ajayi said.

In his opinion, Bob Okonyia, chairman, Bocal Limited, a card scheme, said that the project is not in line with expectations of Nigerians from regulators and policy makers.

“First of all, giving the national identity management project to MasterCard is opening our gateways to foreigners.  Everybody with that card cannot feel at home. Everyone involved in this project should know better.

Even local companies with competence to implement the project were disregarded. What are they trying to achieve? The foreign company is not offering us free service; they are going to be paid in foreign currency, by that they are liquidating the economy. They are pretending as though they want to help us” Okonyia added.

John Owobokiri, a renowned legal practitioner based in Port Harcourt, Rivers State, said that the scheme is not likely to address the controversy that confronts it before it goes into full implementation.

Owobokiri warned of severe consequences if legal limits on use of data to be generated by the exercise are not reviewed, as reported by Nigeria CommunicationsWeek.

But, in the present lawsuit, the panel will hold a two-day hearing to decide whether the matter should go to a full trial. It would be the U.K.’s biggest class action and one of the first filed under the Consumer Rights Act 2015.

"It is difficult to be able to see why Mastercard should be able to prey on millions of people, what’s more without these people knowing they were being injured," Harris said. "This is the archetypal case that the government had in mind when creating this new regime."

Mastercard has faced numerous lawsuits since EU courts said the company’s fees for cross-border payments unfairly restricted competition.

The firm said that a cap imposed by the European Commission on what it charged retailers to process transactions on foreign transactions would shift the burden onto customers, an argument the Court of Justice rejected and opened the door to collective lawsuits from consumers.

The lawsuit was initiated by Walter Merricks, a lawyer who once led the U.K. organization that handles consumer disputes with banks, and Quinn Emanuel Urquhart & Sullivan LLP.

In court documents, Mastercard said the suit should be rejected because the level of damages is "impossible to assess on any reliable basis." The awards allocated to individuals would also "bear no reasonable relationship to their actual loss," the company said.

"Mastercard continues to disagree with the basis of the proposed collective action and we will strongly oppose this claim in the event the court decides to hear the case,” a spokesman said.