San Fransisco, Apr 09: Credit card giants MasterCard and Visa must pay millions of dollars in refunds to customers after the firms failed to properly disclose currency exchange fees, a California court ruled on Tuesday. California Superior Court Judge Ronald Sabraw said that MasterCard and Visa, owned by banks and global financial institutions, violated California's unfair competition law by failing to disclose adequately the currency conversion fees charged to U.S. customers using their cards abroad.
"The exercise of our individual decision making freedoms as consumers becomes meaningless without full market relevant information," Sabraw wrote in a 125-page ruling. "Where there is no information, there is no competition; and where there is no competition, we are on the road to serfdom."
The dramatic ruling found that Visa International collected about $817 million in foreign exchange fees from 1996 to March 30, 2000, and MasterCard $195 million. From these figures, lawyers representing customers expect a refund of more than $800 million. The ruling calls for restitution of fees collected between February 15, 1996 and the present.
A MasterCard official disputed the amount of restitution.
Bureau Report