When you deal with banks, one of the worst things is that they add fees to almost every transaction. One of the simplest ways to get a lot of them seems to be taking out cash from an ATM that is not connected to your bank.
But while this happens all the time and most people have learned to deal with it, there are times when fees are too high and do not make sense. In a case that changed the course of history, this is what was found against Visa, Mastercard, and some of the country’s biggest banks.
An almost excessive number of bank branches have closed recently, leaving customers all over the country with very few places and times to get cash or do everyday things that need a bank, like cashing a check.
There are deals in place so that most transactions can be done at any bank’s ATM these days, even if there is not one close by that accepts your card. However, there are extra costs and fees for this.
That is what the Department of Justice (DoJ) began to look into. Visa, Mastercard, and banks like JPMorgan Chase, Wells Fargo, and Bank of America have been accused of manipulating and inflating ATM fees to make more money than they should have.
They are also thought to have worked together to keep the fees artificially high so that they could make even more money, which hurts consumers and limits fair market competition.
A class action lawsuit was filed by customers who were overcharged fees from October 1, 2007, to July 26, 2024. This led the Department of Justice to start its probe.
In the lawsuit, the people who were hurt say that the practices were unfair and that the institutions should pay for any financial problems their customers may have had because of the higher fees.
Ryan McInerney, CEO of Visa, does not think the DoJ has a case. “We believe the lawsuit is meritless and shows a clear lack of understanding of the payment ecosystem in the United States,” he said.
We will fight hard to protect ourselves, and we are sure that we can show that Visa competes for every transaction in the debit market, which is booming and continues to see new companies enter it.
Even though he protested strongly, JP Morgan Chase, Wells Fargo, and Bank of America all agreed to settle the case for a total of $67 million.
Now, the two credit card companies are also agreeing to a deal to end the problem. Visa will give $104.675 million and Mastercard will give $92.825 million, for a total of $197.5 million in the settlement fund.
The reasons why the Visa and Mastercard settlement is one for the history books
As a result of this settlement, consumers will no longer have to pay unfair fees when using ATMs that were not affiliated with their banks. However, in places where there are no branches or ATMs of those banks, consumers have no choice but to pay the unfair fees.
This is especially bad in places where there are not many banks because there are not many choices and you can not find a better one, which is called a monopoly.
There are antitrust rules that protect people from monopolies that could be used here. The lawsuit could force the banks to drop the fees in these areas that do not get enough service.
The lawsuit could also set a standard that stops these kinds of actions from happening in other places, where they could hurt consumers even more. This could help change the rules about payments.
Consumers who think the high fees have unfairly affected them have until November 22, 2024, to make a claim for reimbursement along with any proof they may have. This way, you will be able to get the part of the funds that are set aside for your case.