Legal Investigation: Did AMEX’s Rules Make Your Business Overpay in Swipe Fees?
Last Updated on January 19, 2024
At A Glance
- This Alert Affects:
- Merchants who accept American Express and other credit cards.
- What’s Going On?
- Attorneys working with ClassAction.org are gathering small- to medium-sized business owners to take legal action against American Express. They believe American Express’s rules against merchants surcharging customers or “steering” them toward cards with lower fees are illegal and have cost the typical small business owner tens of thousands of dollars.
- What You Can Do
- If you’re a merchant who accepts American Express and other credit cards, join others taking action by filling out the form linked below.
- What Am I Signing Up For, Exactly?
- You’re signing up for what’s known as “mass arbitration,” which involves hundreds or thousands of people bringing individual arbitration claims against the same company at the same time and over the same issue. This is different from class action litigation and takes place outside of court.
- Does This Cost Anything?
- It costs nothing to sign up, and the attorneys will only get paid if they win your claim.
- How Much Could I Get?
- While there are no guarantees, attorneys working with ClassAction.org believe merchants could be owed anywhere between $10,000 and $70,000 depending on the specifics of their business.
- What’s the Catch?
- There is none. Attorneys working with ClassAction.org believe merchants across several industries have been illegally limited when it comes to handling credit card processing fees. They’re now helping these business owners take action. It doesn’t cost anything to sign up, and the attorneys only get paid if they win your claim.
Attorneys working with ClassAction.org are looking to take action against American Express on behalf of merchants who accept their credit cards.
For years, American Express has imposed unfair – and potentially illegal – rules on small- to mid-sized business owners that have led them to pay grossly inflated fees for accepting credit cards at their establishments.
Specifically, American Express has prohibited merchants from influencing customers in any way to choose a more business-friendly payment method and from surcharging to help recoup costly credit card processing fees.
In a competitive market free of American Express’s limitations, merchants would be able to:
- Levy extra charges onto customers who use expensive credit cards
- Advertise that customers could save by using certain credit cards or other forms of payment
- Negotiate lower fees with credit card companies in exchange for pushing more people to use their cards
- Simply ask customers to use more business-friendly payment methods
Essentially, businesses would be paying far less in swipe fees to credit card networks if not for AMEX’s rules, and attorneys believe they can now help these merchants recover the tens of thousands of dollars they lost due to American Express’s limitations.
What Am I Signing Up for, Exactly? Is This a Lawsuit?
You are not signing up for a lawsuit, but rather a process known as mass arbitration. This is a relatively new legal technique that, like a class action lawsuit, allows a large group of people to take action and seek compensation from a company over an alleged wrongdoing. Here is a quick explanation of mass arbitration from our blog:
“[M]ass arbitration occurs when hundreds or thousands of consumers file individual arbitration claims against the same company over the same issue at the same time. The aim of a mass arbitration proceeding is to grant relief on a large scale (similar to a class action lawsuit) for those who sign up.”
American Express’s merchant operating guide contains an arbitration agreement, which is why attorneys working with ClassAction.org have decided to handle this matter as a mass arbitration rather than a class action lawsuit.
American Express Processing Fee, Surcharge Rules
American Express has long charged merchants a higher processing fee than competitors and its rules dictate that the merchant cannot steer customers toward using credit or debit cards with lower swipe fees.
American Express prohibits merchants from advertising that customers could, for instance, save two percent on their purchase if they used Discover, or from asking customers to help the business keep prices low by using a debit card.
The company has also banned merchants from surcharging customers to help recoup costly credit card fees. While there are pilot programs with some credit card processors that now allow certain merchants to surcharge, Amex’s surcharge ban covers most U.S. transactions, and all businesses have been subjected to American Express’s anti-competitive rules for many years – and have lost profits because of it.
How Much Does This Cost?
It costs nothing to sign up, and you’ll only need to pay if the attorneys win money on your behalf. Their payment will come as a percentage of your award.
If they don’t win your claim, you don’t pay.
How Much Money Could I Get?
There are no guarantees as to how much money you could get or whether your claim will be successful. Attorneys have reason to believe, however, that most merchants may have claims worth between $10,000 and $70,000, depending on the specifics of their business.
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