Lawsuits Against Credit Card Issuers
Did you know that the Department of Justice had sued Visa, Mastercard and American Express on our behalf, and is still battling American Express in court?
Yup, about two months ago the DOJ sued all 3 companies for basically trying to ice out any competitors, including store cards, from competing against them through some of their practices and rules. Almost immediately Visa and Mastercard caved and said they would offer incentives to help buyers; American Express has decided to fight it in court.
Of course this is a big money issue. What’s at stake is discounts that stores wanted to give to its customers, which of course would save us money. It seems that the credit card issuers were trying to force stores to pay what’s known as interchange fees on the original price and not the discounted price. Although the amount might seem small, as in between 2 or 3%, when you thrown in potentially thousands of transactions that ends up being a large amount of cash that stores get cheated out of, and of course consumers then get cheated because there’s no incentive to give any discounts at all.
Visa and Mastercard settled by saying they wouldn’t stop stores from offering either discounts, rebates, or special deals for using their own cards. Why American Express is fighting this one is beyond me, other than the possibility that they don’t see themselves as a traditional credit card, since almost their total product relies on its consumers paying the balance off every month. However, there are also so many stores that don’t accept American Express even now that one would hope they’d see this as a bad PR move and would acquiesce in some fashion.
Who says the federal government isn’t looking out for our interests?