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Ensuring Credit Card Companies Play Fair
Posted by Web Team on October 4, 2010 at 7:59 am
Attorney General Gansler Sues Major Credit Card Companies for Preventing Merchant Discounts and Incentives
Attorney General Gansler, the United States Department of Justice and six other states filed an antitrust lawsuit against American Express, Visa and MasterCard challenging the card network's rules that prevent merchants from offering discounts or other incentives to consumers if they use lower-cost cards for payment of goods and services.
“The card network's rules make it impossible for merchants to negotiate lower rates, and they drive up consumer prices,” said Attorney General Gansler.
Merchants who accept credit cards must pay a fee each time a consumer makes a purchase with a credit card, and different types of cards carry different fees. Merchants pass the costs of credit card transactions onto consumers by way of higher retail prices. The card networks’ rules prohibit merchants from offering consumers incentives to use a lower-cost card, causing merchants’ costs of doing business and consumer prices to rise.
At the same time, Maryland, the Department of Justice and the other states filed a proposed settlement with Visa and MasterCard that would require the two companies to allow merchants to offer discounts, incentives and information to consumers to encourage use of less costly cards. A merchant who accepts only Visa and MasterCard may take advantage of the relief immediately.
“With this settlement and litigation, consumers will see a wider range of competitive prices for goods and services,” said Attorney General Gansler.
Connecticut, Iowa, Michigan, Missouri, Ohio and Texas also joined the lawsuit.
blog comments powered by DisqusMeet Doug Gansler
Since taking office, Doug Gansler has distinguished himself by prosecuting polluters of the Chesapeake Bay, protecting consumers from corporate and insurance fraud, safeguarding the public from gangs, and attacking the underbelly of the Internet. More
