Washington, DC – September 25, 2019 – A group of non-bank ATM operators, represented by MoginRubin LLP, has moved to certify a class of operators across the U.S., arguing that Visa Inc. and its affiliated banks, and Mastercard Inc. and its affiliated banks, each conspired to fix ATM fees, forcing the operators to pay anticompetitive overcharges for network processing fees. These overcharges have also resulted in consumers paying higher ATM surcharges when they use ATMs not associated with their own bank, known as a “foreign transaction” in industry jargon.
Brought on behalf of a proposed class that represents 60% of the U.S. ATM market, the plaintiffs argue that Visa and Mastercard’s rules, which effectively require ATM operators to set the same surcharge for all networks accepted at an ATM, nakedly fix the price for retail ATM services and insulate Visa and Mastercard’s banks from price competition for foreign ATM transactions. The plaintiffs, who deploy ATMs at locations often ignored by banks and other financial institutions, continue to be unfairly restrained because they cannot set consumer fees according to network costs, so they cannot respond when Visa and Mastercard charge them exorbitant ATM processing fees. The operators argue that eliminating the rules and allowing differential pricing for different networks would allow them to reward card customers who choose to use more competitive ATM networks.
The proposed class representatives are: ATMs of the South, Inc., Business Resource Group, Inc., Just ATMs USA, Inc., Wash Water Solutions, Inc., ATM Bankcard Services, Inc., Selman Telecommunications Investment Group, LLC, Scot Gardner d/b/a SJI, Turnkey ATM Solutions, LLC, Trinity Holdings Ltd, Inc., and T&T Communications, Inc. and Randal N. Bro d/b/a T&B Investments.
The offending ATM Access Fee Rules were adopted, the plaintiffs maintain, while Visa and Mastercard were unincorporated associations controlled and operated by 20,000 horizontally competing banks, which one federal court once called a “consortium of competitors.” While Visa and Mastercard have since become publicly held corporations, their ATM Access Fee Rules have not changed.
“The restraint is the legal cause of an overcharge injury suffered by all Class Members,” the plaintiffs argue, moving for an order certifying a class of all non-bank ATM operators located in every state and the District of Columbia that originated an approved surcharged cash disbursement transaction at one of their terminals since October 2007. The motion to certify the class was filed on Friday, Sept. 20, 2019, in U.S. District Court for the District of Columbia (National ATM Council Inc., et al. v. Visa Inc., et al., No. 1:11-CV-01803-RJL, D. D.C.).
Almost five years ago the card companies and banks attempted to have the case dismissed, but in August 2015 the U.S. Court of Appeals for the District of Columbia held that the ATM operators had pleaded a sufficient economic case for horizontal conspiracies to restrain trades. The card companies persisted, taking the case to the Supreme Court. The court granted review of whether allegations that members of a business association have agreed to a set of rules is sufficient to plead a conspiracy in violation of the Sherman Act. However, the Supreme Court found that after persuading it to consider the case, the defendants had changed their argument. The court, therefore, on Nov. 17, 2016, dismissed the writ as “improvidently granted” (Visa Inc. v. Osborn, 137 S. Ct. 289, 2016 U.S. LEXIS 6921, 196 L. Ed. 2d 396, 85 U.S.L.W. 3245, 2016 WL 6808590).
“At its core, this case is about absurd rules, made up by Visa, Mastercard and the banks that stop independent ATM operators from passing on savings to consumers who choose less expensive or more efficient networks, in other words, consumers who choose the defendants’ competitors,” said Jonathan Rubin of MoginRubin LLP. “The independent ATM operators and regional networks are providing a necessary service that banks are unwilling to provide or to invest in, but Visa and Mastercard are using their market power to impose anti-competitive fees and bleed the operators and consumers for their own profit,” he added. “Mastercard and Visa have no business telling independent ATM operators what to charge.”
Litigation over transaction fees is nothing new for Visa and Mastercard. In September 2018, for example, the card companies and a group of banks agreed to pay $6.2 billion to settle conspiracy claims brought by merchants over credit card transaction fees charged at the point-of-sale.
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