Credit Card Fee Settlement Announced

Manhattan, NYCredit card companies are always finding new ways to hike their rates in order to make more money.

One easy way for some credit card companies to make extra money was the foreign currency fee, until a lawsuit was filed challenging that fee. That class action lawsuit, filed against several major credit card companies for such excessive charges, has now been settled.

The settlement, which was granted preliminary approval by a federal judge on November 8, 2006, will see the defendants in the case pay $336 million to their customers. People who used their credit or debit cards overseas from February 1, 1999 until the present may be eligible for part of the award.

The class action lawsuit was filed in response to what many people saw as excessive fees for foreign currency transactions. Plaintiffs in the case argued that when they used Visa or MasterCard in foreign countries they were charged up to three percent extra for currency conversion into U.S. dollars.

Furthermore, the suit claimed that the credit card companies often hid these extra charges rather than fully disclosing them. In many cases, the foreign currency charges were not even listed separately on monthly statements. For example, a $100 purchase would simply appear as a $103 purchase, rather than as a $100 purchase with a $3.00 foreign currency charge.

Lawyers for the plaintiffs argued that these fees violated federal and state anti-trust laws and disclosure laws.

The defendants in the case include Visa International, MasterCard Inc., Bank of America Corp., Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co., Washington Mutual Inc., and some affiliates of those companies. Those companies deny any wrongdoing related to this issue. A spokesperson for Bank of America said that foreign transactions are more likely to be fraudulent, so the foreign currency fee keeps the bank's costs down.

Final approval in the lawsuit is scheduled for November, 2007.

If you hold a credit card or debit card with any of the companies named here, and you used that card in a foreign country between February 1, 2006 and the present, you may be eligible for part of the award. Contact a lawyer to discuss your options.