Lawyer Emails Put Visa, MasterCard Settlement at Risk

by Sarah Grotta 0

The court dispute over fees charged to merchants, the so called “swipe fees”, should have been resolved between Visa, MasterCard and merchants with the $6 Billion settlement reached in 2012. Apparently, it’s not over yet. In a strange turn of events, it was uncovered that an attorney representing MasterCard was openly communicating with a representative for the merchants in this case. Merchants contend the information was confidential in nature and therefore will look to un-do the settlement with MasterCard and Visa and the pending $79 Million settlement with American Express.

Experts not associated with the case said it is bizarre for a number of reasons. In particular, the notion of rival lawyers sharing confidential client documents raises significant ethical issues and potentially represents “gross misbehavior,” says Geoffrey Hazard, a legal ethics expert who teaches at the University of California’s Hastings College of Law. At a hearing last week, the magistrate who has been overseeing the sharing of the emails among the parties described the situation as “a serious breach,” according to a transcript of the hearing.

It will be a relief when these legal actions, plus other pending lawsuits between merchants and banks, global payment networks and EFT debit networks are in the rearview mirror and the focus for resources can be the development of the future of payments.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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