– Author: Simon Zekaria

IN BRIEF

Mastercard  and  Visa  are  facing  new  claims  for  damages  in  the  UK,  after  luxury  hotel operator  Grange  Hotels  filed  lawsuits  to recover  more  than  200,000  pounds  in inflated card fees, MLex understands.

Mastercard and Visa are facing new claims for damages in the UK, after luxury hotel operator Grange Hotels filed lawsuits to recover more than 200,000 pounds in inflated card fees, MLex understands.

The  hotel  operator  filed  two  separate  claims  at  the  High  Court  in  London  on  Oct.  1.  The lawsuits  argue that  the card networks’  so-called  interchange  fees were “at all times  higher than it would otherwise have been,” according to documents seen by MLex. Grange Hotels is claiming damages for losses suffered “as a result of the unlawful fees and rules.”

The  hotel  operator  is  also  seeking  a  “declaration”  that  the  relevant  fee  arrangements  “are and have at all material times been void and unenforceable.”

Mastercard and Visa have faced a raft of competition-related actions over their interchange fees, which started after the European Commission declared the level of the fees illegal.

Credit- and debit-card transactions worldwide are engineered around the charges — set by the card networks — which are paid by a retailer’s “acquiring” bank to the cardholder’s “issuing” bank.  The  acquiring  bank  then  deducts  a  “merchant  service  charge,”  including  interchange and other costs, before passing payments on to the retailer.

Litigants  say  the  fees  restrict  competition  between  acquiring  banks  in  breach  of  antitrust
rules, and drive up costs for retailers and consumers bound to the system. The card networks
say  the  charges  don’t  impact  on  competition  and  that  they  create  benefits  across  the
payment system.

Grange  Hotels  is  seeking  compensation  of  more  than  100,000  pounds  ($131,000)  each  from both Mastercard and Visa, according to information seen by MLex.

The group owns 17 hotels, with all but one located in London.

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