Small business owners Mitch Goldstone and Carl Berman are the lead plaintiffs in a lawsuit against big credit card companies.
By YOLANDA SANCHEZ IRVINE WORLD NEWS, [Oct 26, p 19]
Last year, 30 Minute Photos Etc. received notice that interchange fees, the fee that banks charge retailers when customers pay with credit cards, would increase for frequent-flier cards.
Mitch Goldstone, co-owner of 30 Minute Photos Etc. and 30minphotos.com, wouldn’t hear of it.
Goldstone became lead plaintiff in a lawsuit filed in June 2005 against Visa, MasterCard and a host of banks that issue the credit cards. The lawsuit accuses banks of violating antitrust laws by conspiring to fix the fees at levels that aren’t justified by the costs of processing transactions.
Credit card companies counter that the rates are determined by the open marketplace and the services they provide increase sales.
Here’s an interview with Goldstone.
Why did you decide to take this on and be named as the lead plaintiff?
It upset me because it meant customers were being taken for a ride. After we received the letter I contacted Visa and MasterCard but received no response. I was then quoted in the Wall Street Journal. (Goldstone was then contacted by the law firm that filed the suit). I never thought I would be the lead plaintiff representing all of these merchants, but it is something that is very important to me.
Why do you think this is such an important issue?
Because it impacts every retailer and consumer. The banks are doing what the railroad industry did 100 years ago when it said to farmers this is what we are going to charge you to transport goods. Farmers had no choice because otherwise their goods would spoil. Visa and MasterCard account for 80 percent of all credit card transactions.
How have you seen these fees change?
In 1990 we had to take a credit card and imprint it on a stack of carbon copies. We mailed our copies to a facility in Florida where they were checked for fraud and other things. That is what the fees were created for. Back then there were about 10 interchange fees. Now there are about 100. But if you pay with a check the interchange fee is zero even though there are a lot of clearing costs.
When and why did you launch WayTooHigh.com?
We launched it in spring 2005. I was receiving so many calls and inquiries from the media and merchants all over the U.S. and I couldn’t talk with everyone. Now I just say go to Way Too High.
What stage is the lawsuit in and what’s the next step?
It is being heard in federal court in New York. It has been merged together with the other lawsuits – there are upwards of 50 separate lawsuits – in a multi-district litigation, with my law firm being lead firm. The next step is to get class action status. This will get all retailers in on the case.
What resolution would you like to see come out of this?
Ultimately there should be no interchange fees; there’s no need for it, and that is why this case is so important. I’d like to have Visa and MasterCard print out on every receipt the exact amount that goes to interchange fees.
[Source: Irvine World News]
