In a landmark legal decision, Mastercard has agreed to a £200 million settlement following a class action lawsuit that could see up to 47 million UK consumers receive compensation for overcharged fees spanning from 1992 to 2008. This case, spearheaded by former financial ombudsman Walter Merricks, marks one of the largest consumer settlements in UK history.
Background of the Lawsuit
The legal action against Mastercard began in 2016 when Walter Merricks filed a claim alleging that the company imposed unlawful interchange fees on retailers. These fees, charged between 1992 and 2008, were argued to have been indirectly passed on to consumers through higher prices for goods and services. The lawsuit was initiated under the Consumer Rights Act 2015, which allows for collective legal claims on behalf of consumers. Initially, Merricks sought damages ranging between £10 billion and £15 billion, representing the estimated overcharges to consumers during the 16-year period.
Settlement Details
After nearly a decade of legal proceedings, the Competition Appeal Tribunal approved a £200 million settlement in May 2025. While this amount is significantly less than the original claim, it still represents a substantial payout to affected consumers. The settlement does not include an admission of liability by Mastercard but concludes the long-standing dispute. Eligible consumers can claim compensation of up to £70 each. The exact amount received will depend on the number of claimants who come forward. If only a small percentage of eligible individuals file claims, the payout per person could be higher; conversely, if many claim, the individual amounts may be lower. The claims process is expected to be managed by Epiq Class Action & Claims Solutions, with an online portal for submissions anticipated to launch soon.
Eligibility Criteria
To be eligible for compensation, individuals must meet the following criteria:
- Resided in England, Wales, or Northern Ireland for at least three months between June 1997 and June 2008, or in Scotland between May 1992 and June 2010.
- Purchased goods or services from a business that accepted Mastercard during the relevant period.
- Were over 18 years old and living in the UK on 6 September 2016.
- Notably, individuals did not need to own or use a Mastercard themselves; purchasing from a retailer that accepted Mastercard suffices for eligibility.
Implications and Reactions
The settlement has been hailed as a significant victory for consumer rights in the UK. Walter Merricks expressed satisfaction with the outcome, stating that the case established important legal precedents for collective actions under the Consumer Rights Act. He noted that while the settlement amount is less than initially sought, it still represents a meaningful recovery for consumers and sets the stage for future collective redress actions. However, the distribution of the settlement has faced criticism. Reports indicate that legal fees amounted to £18 million, and litigation funder Innsworth Advisors is set to receive approximately £100 million, leaving a smaller portion for actual claimants. This has sparked debate over the fairness of third-party litigation funding and the need for greater transparency in such arrangements.
Next Steps for Claimants
Consumers eligible for compensation are encouraged to monitor the official claims website, mastercardconsumerclaim.co.uk, for updates on the claims process. Once the portal is live, individuals will have a six-month window to submit their claims. Payments are expected to be distributed within 28 days of claim approval. This case underscores the potential for collective legal actions to hold corporations accountable and recover funds for consumers. It also highlights the importance of consumer awareness and participation in such settlements to ensure rightful compensation is received.
