NRF Files Appeal to Overturn Swipe Fee Settlement
WASHINGTON, D.C. -- It's official: Retailers are not ready to give up the fight over credit card swipe fees.
NRF (formerly The National Retail Federation) is appealing the settlement in a 2005 class-action lawsuit concerning swipe fees, which are also referred to as interchange fees. In a motion filed Thursday, the group of retailers is asking the 2nd U.S. Circuit Court of Appeals to overturn a lower court's ruling.
"NRF is filing the appeal to overturn the flawed credit card swipe fee settlement. The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future," said NRF Senior Vice President and General Counsel Mallory Duncan.
"Instead of lowering fees, the card industry's settlement proposes that merchants pass them along to consumers in the form of surcharges. That is absolutely the opposite of what retailers sought, and major retailers have soundly rejected surcharging," she added.
NRF's notice of appeal comes three weeks after U.S. District Judge John Gleeson granted final approval to a $5.7-billion settlement in the case that saw retailers battling Visa Inc., MasterCard Inc. and other financial institutions over the swipe fees. Despite the ruling, retail organizations such as NRF and NACS, the Association for Convenience & Fuel Retailing voiced objections to the deal.
"There has been no agreement to this settlement by the retail industry. Instead, there's a settlement with nine individual retailers whose views are not representative of the collective industry," Duncan continued. "A majority of the original plaintiffs in the case repudiated the settlement as soon as they saw its terms. The nation's largest retailers have spoken out against it, and close to 8,000 retailers and merchants have formally rejected the proposal. This is an abuse of the class-action system and should never have been approved.
"The only people pleased with this settlement are Visa and MasterCard because it means they can continue collecting tens of billions of dollars in hidden fees; the class-action lawyers who stand to collect half a billion dollars in fees without fixing the problem; and a lower court, which has cleared a time-consuming case off its docket but has done a serious disservice to merchants and the public in the process," she stated.
NRF is a retail trade association that represents discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries.