Skip to main content

The EU announced its ruling today that MasterCard has six months to cut its illegal fees before the EU starts putting on penalties of its own.  

From the Washington Post:

"The European Union's executive European Commission said that for 15 years MasterCard's multilateral interchange fee (MIF) on cross-border payment card transactions using MasterCard and Maestro cards violated EU rules on fair competition."

But whats even more interesting is that the EU states that this fee hits not just credit card users but also regular consumers who use cash.

From CNNMoney:

"Competition commissioner Neelie Kroes said: 'Multilateral interchange fee agreements such as MasterCard's inflate the cost of card acceptance by retailers. Consumers foot the bill, as they risk paying twice for payment cards: once through annual fees to their bank and a second time through inflated retail prices paid not only by card users but also by customers paying cash.'"

More after the jump.

While it is pretty much certain that MasterCard will attempt to appeal this ruling, this is major ruling for consumers against unfair fees that the credit card companies has been lobbing on us for years without most of our knowledge.  I've heard about interchange fees before since I've done some work with Unfaircreditcardfees.com and have since been following the issue, but most people don't know their even paying them.  

As I said before, the really interesting thing about what Kroes said above was that people who aren't even using credit cards are suffering because of their fees.  These interchange fees that are charged to businesses cause retail prices to go up to make up the difference - and that hits everyone regardless of payment method.  On top of that, people who do use cards are when everything is said and done paying fees twice for one purchase - once on their regular annual and interest fees, and the second time on the inflated price of the goods they purchase.  

And it looks like MasterCard isn't alone in this.  From Reuters:

"The European Commission's order for MasterCard to change the way it sets fees or face fines will act as a guide for its rival Visa Europe, the EU executive said on Wednesday.  'We will certainly be active and not wait,' EU Competition Commissioner Neelie Kroes told a news conference."

So it looks like we can expect some major opposition from the entire credit card industry coming up on this issue.  The reason that I think we can expect major opposition on this issue is because I can't see any difference as to the interchange fees paid in Europe and those we pay here.  If its unfair and illegal for people to be double charged in the EU shouldn't our own lawmakers be looking into this hear?  Or are these American based companies better at lobbying here than abroad and therefore safe from reform?

I would hope that this ruling would spark some discussion in the US - I'm sure no one this time of year is in favor of being double charged by the credit card companies on all their holiday purchases.  But maybe I'm wrong, maybe what's good for the goose is good for the gander unless it comes to billions of dollars in profits for the credit card companies in the US...

Originally posted to Lodowick on Wed Dec 19, 2007 at 09:50 AM PST.

Poll

Should we get rid of the same credit card interchage fees here in the US?

92%35 votes
2%1 votes
5%2 votes

| 38 votes | Vote | Results

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  Well that's a small step. (3+ / 0-)
    Recommended by:
    possum, middleroad, Lujane

    Which is good.

    I can't believe that credit card companies can get away with what they get away with when there are supposedly laws that outlaw loan sharks.

    Wait a minute, I CAN believe it. What it takes to create disbelief in the power of corporations...defies belief.

    "In all chaos there is a cosmos, in all disorder, a secret order." Carl Jung

    by Unduna on Wed Dec 19, 2007 at 09:59:58 AM PST

  •  *Sigh* (3+ / 0-)
    Recommended by:
    exNYinTX, middleroad, Lujane

    I wish I lived somewhere where the government was interested in protecting individual rights over corporate greed...

  •  There is a reason it is spelled MIF and not MILF (1+ / 0-)
    Recommended by:
    exNYinTX

    "multilateral interchange likeable fee"?  Hardly.  The "L" is left out of this acronym for a reason.

    No one seems to like these except for the companies making the profit.  They just make ppl MIF'd (i.e., miffed - haha).  The only time I like a few cents tacked on to my purchase is when I know if is going to a charity (and even then, I like to know that the admin/overhead costs are capped at 10% of my donation).

    Thanks Europe for paving the way.  

  •  There is a court approved settlement (0+ / 0-)

    US District Court (Southern District of NY) has approved a settlement to refund charges on Visa, MC and/or Diners Club, as well as ATM charges for foreign transactions between Feb. 1, 1996 and Nov. 8, 2006.

    http://ccfsettlement.com/

    "The truth is rarely pure and never simple." The Importance of Being Earnest, Act I, Oscar Wilde, 1895

    by Cordelia Lear on Wed Dec 19, 2007 at 03:04:27 PM PST

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site