Class action suit spurs refunds of currency exchange fees

If you used your credit, ATM, or debit card for foreign transactions, you could be eligible for a refund of some of the currency exchange fees you paid, according to the proposed settlement of a class-action lawsuit brought against Visa, MasterCard, Diners Club, seven major banks, and affiliated companies. But you must file your request by May 30.

Under the proposal, payments would be available to anyone who used a Visa-, MasterCard- or Diners Club-branded credit, charge or debit/ATM to make foreign transactions while traveling abroad or over the Internet from Feb. 1, 1996 to Nov. 8, 2006. Covered transactions include purchases, cash advances, and cash withdrawals.

The refunds are expected to be at least $25, though they could be higher for individuals and corporations who actually can provide good estimates of their foreign transactions.

The proposal would settle charges that the card companies, their member banks, and affiliated firms conspired to set and conceal the markups and fees on currency exchange rates, typically 1 to 3 percent of foreign transactions. The class action suit also alleges that the companies failed to disclosure the fees adequately.

In agreeing to settle the case, the defendants denied wrongdoing, saying that the rates had been properly established and disclosed. They said they were agreeing to settle the case to “avoid the inconvenience, expense and uncertainty of litigation,” according to the notice posted on the settlement Web site.

The other defendants include Bank of America, Bank One/First USA, Chase, Citibank, HSBC/Household, MBNA and Washington Mutual/Providian, as well as certain affiliated and predecessor companies.

Under the proposal, the defendants would pay $336 million to pay claims, attorneys' fees and expenses. The proposal also would require them to make certain disclosures to cardholders about the rates used to calculate the U.S. dollar amount owed for a foreign transaction and any fees applied in connection with a foreign transaction. The proposal received preliminarily approval the U.S. District Court for the Southern District of New York on Nov. 8, 2006. A hearing on final approval has been set for March 31.

To participate, you must file a claim form by May 30. The claim form allows participants to opt for one of three types of refunds:
• Easy refund of $25. This option is recommended for those who traveled outside the U.S. for less than one week or had foreign transactions of less than $2,500 using the affected cards.
• A refund of up to 1 percent of estimated transactions. Based on typical spending during foreign travel and your answers to a few questions, this is recommended for those who traveled outside the U.S. for more than one week or had foreign transactions of more than $2,500.
• A refund of up to 1 to 3 percent of annual estimated foreign transactions. This option is recommended for those who had extensive foreign transactions and who can provide year-by-year information.

Any amounts, including the $25 easy refund, could be lower if participation exceeds expected levels.

Affected card holders also can object to or opt out of the proposed settlement by Feb. 14. Those who do not opt out would be covered automatically by the settlement terms, including giving up their right to pursue further claims against the companies.

For further information or to obtain a claim form visit the settlement Web site or call 1-800-945-9890.—Anthony Giorgianni

Comments

[Barbara Ruggiero]

Where do I go to file my request to join the lawsuit?
We have gone overseas every year.
1996 we went to Astralia for 150 days
1997-2007 we have been in Italy five months 150days a year
which is equal to 1,500 days in Italy for that ten year period
for both of us. We used Visa to buy tickets via the internet and used Visa to purchase goods, food, rental cars, gas,gifts, bus tickets. we used our debit card with the Vis logo to buy food and clothes too.

[D Tufts]

I lost the form sent me regarding this claim, and am reluctant to give out my bank account number online (which is what they say to do if you don't have the form.) Am I justified in my concerns or is it the only way to establish identity?

I spent quite a long time overseas and would receive a refund. When I call I get no answer - ever.

[E. Dietrich]

I just learned about this litigation and never received any of the notification mailings. The deadline to file is in 2 days! How can this move forward if all effected parties were not notified?

[joanne eldred]

I sent in my claim form and opted for the easy $25 . I have never received the check and questions to the administrators go unanswered. I( think this is a scam!

[Patty Johnson]

Might someone post a date that folks like me who filed a claim in plenty of time might receive a refund? What is the status?

[Mark D]

I am tired of chicken littles screaming "scam" "scam" - settlements like this take months or sometimes years to receive the check. If you check the website link for the settlement administrators you will find that the checks are still pending final approval - if you wanted to opt out of the lawsuit and file a small claims which in California the limit is $7500 - too late so we have to wait for the claims to be verified and for any pending legal issues which may result in or include motions, objections, hearings, formal appeals...it could take a week, a month, several more months or a year or two more or longer depending.
So before you start running around spreading unfounded rumors about your $25 check...there are alot of people who over that period of time spent tens of thousands dollars on forex transactions with their covered credit or debit cards and especially in this economy thousands of people are waiting for much more than $25 and they are checking the website to see it the status has changed and whether the processing of claims is complete and checks are being disbursed.
Be patient, be informed, be intelligent. There is enough stupidity running rampant the past nine years in Government and the financial system...let's see if the citizenry can show ourselves to be mindful, objective and factual in regards to our personal business and comments.

[Dave]

I have heard from colleagues who actually received settlement checks already, even though we submitted claims on the same day, right before the deadline. Has anyone else heard of some checks being disbursed??