Mike Scarcella
(Reuters) – Visa (NYSE:) and Mastercard (NYSE:) agreed to pay $197 million to settle a class action lawsuit by millions of consumers accusing financial payments companies of artificially inflating fees for accessing cash.
Lawyers for the plaintiffs disclosed the proposed agreement Wednesday in a lawsuit filed in federal court in Washington, D.C. The settlement involves consumers who withdrew cash from the bank’s ATMs since 2007.
Two other related class action lawsuits—one from consumers who used unbanked ATMs and a third from businesses that owned independent ATMs—are pending in federal court in the District of Columbia.
The proposed transaction is subject to court approval. All defendants deny any wrongdoing.
Visa will pay $104.6 million under the agreement and Mastercard will pay $92.8 million, according to settlement documents. The defendant banks previously settled the claims for $66 million.
Visa and Mastercard did not immediately respond to requests for comment.
Lawyers for the plaintiffs said the settlement “will provide immediate and guaranteed relief.”
Plaintiffs in the three cases said Visa and Mastercard ATM network rules forced them to pay artificially higher fees for access. Collectively, they sought more than $9 billion in damages.
The decision comes after the U.S. Supreme Court in April rejected an appeal by Visa and Mastercard challenging a lower court judge’s ruling allowing groups of plaintiffs to join together to file a class action lawsuit.
Visa and Mastercard argued that the judge did not conduct a “thorough analysis” before approving the class actions.
The proposed settlement class is estimated to have at least 175 million members.
Consumers will have the opportunity to object to the terms of the settlement, including the fund amount and any legal fees that were awarded.
Visa and Mastercard are defendants in a long-running lawsuit in Brooklyn federal court over allegations that they overcharged merchants and others on debit and credit card transactions.