a machine with a screen and buttons
Photograph ©2022 by Brian Cohen.

Mastercard and Visa Agree to Pay $197 Million to Settle Lawsuit

The credit card companies are accused of keeping fees high at automated teller machines.

Mastercard and Visa both agree to pay $197 million to settle a class action lawsuit, which accuses the credit card and financial payment companies of keeping fees artificially high whenever as many as 215 million consumers withdrew cash at automated teller machines in the United States since 2007.

Mastercard and Visa Agree to Pay $197 Million to Settle Lawsuit

According to the official settlement that was filed in the United States District Court for the District of Columbia:

  • Visa will pay $104.6 million
  • Mastercard will pay $92.8 million

The plaintiffs in this lawsuit originally sought damages of greater than $9 billion in total.

Mastercard and Visa have already settled claims for $66 million.

Two other related class action lawsuits are pending in the United States District Court for the District of Columbia from:

  • Consumers who used automated teller machines that are not operated by banks
  • Businesses that own independent automated teller machines — are pending in D.C. federal court.

The proposed settlement is subject to approval from the court.

The defendants have all denied any wrongdoing and had been vehemently defending their actions for years: “Mastercard and Visa object that the district court failed to ‘take a hard look at whether plaintiffs’ injury models can prove classwide injury through common proof,’ as binding precedent requires; they assert that the court instead pretermitted the requisite legal scrutiny by ‘improperly deferring it to the ‘merits’ stage’”, according to an official judgment that was filed on Tuesday, July 25, 2023 with the United States Court of Appeals for the District of Columbia Circuit.

How to Avoid Fees at Automated Teller Machines

At one point or another while traveling, you might find yourself in need of cash. An automated teller machine usually provides a convenient way to access your cash — but you should not be required to pay an exorbitant fee just for doing so.

“Generally, you can avoid ATM fees by using your own bank or credit union’s ATMs because most banks and credit unions don’t charge a fee for this service”, according to the official Internet web site of the Consumer Financial Protection Bureau of the United States. “Usually, when you use another bank or credit union’s ATM, both the operator of the ATM and your bank or credit union charge you a fee.”

Some banks and credit unions offer to rebate fees for using automated teller machines. You can also check with the bank or credit union that you use to find out what automated teller machines you can use without an additional fee.

Networks can also be financially beneficial to you. Chances are that you will not need to pay a fee to use an automated teller machine if it is in the same network as the financial institution which you use. Three examples of such networks include:

You might be able to use digital payment providers — such as Venmo or Zelle — to send cash to retailers instead of needing to withdrawing it from an automated teller machine. Check first that your preferred payment mobile software application program is accepted by the merchant — as well as ensuring that you are sending money to the correct recipient, as once that money is paid, it is gone.

You may have the option of getting cash back with a purchase when checking out at a supermarket or other retailer. Simply pay with a prepaid card or debit card, and enter your personal identification number. You will be prompted to either select an amount or enter the amount which you would like returned to you in cash to be withdrawn from the account associated with the card. You usually will not be charged a fee when getting cash back from a retailer.

Withdrawing larger sums of money from automated teller machines less frequently than smaller sums of money more frequently will save money on fees — as long as you do not exceed the limit imposed on withdrawing cash in a period of 24 hours.

Finally, consider banks and credit unions which do not assess fees at automated teller machines in different countries if you travel frequently.

You may not be completely successful at avoiding paying fees at automated teller machines when using them — but you can certainly reduce the amount of money you spend on those fees.

Final Boarding Call

I have not had the need to withdraw cash from an automated teller machine in years, as I typically use credit cards for most of my financial transactions — so I have not had to pay any fees to use one.

Moreover, I will withdraw a modest amount of cash from a bank in person prior to embarking on a trip if I know that credit cards are not as prevalent in the countries which I am visiting as they are in the United States.

I often return from a trip with most — or all — of my cash. Credit cards are usually the way to go to pay while traveling — especially when financial incentives to do so are involved, as I pay off my credit card statements in full every month to avoid paying interest and fees.

If you are eligible to be in the class to receive some sort of payment as a result of this settlement, forget about getting rich from it: if $197 million is awarded to as many as 215 million people, that comes out to a grand total of almost 92 cents per person…

…and that is likely before the attorneys involved in this lawsuit receive their compensation…

Photograph ©2022 by Brian Cohen.

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