Pause in Remembrance of Civil Rights Icon, Coretta Scott King

January 31, 2006

Coretta Scott King, who surged to the front of the fight for racial equality in America after her husband Martin Luther King Jr. was murdered in 1968, has died at age 78. Mrs. King’s steely determination, grace and class won her millions of admirers inside and outside the civil rights movement. (Reuters)


Banks Profit Margins Beat Even Exxon Mobil (

January 31, 2006

To soften the effects from earning an historic $36 billion – in just one year – at the expense of profiteering from motorists and holding our economy hostage, Exxon Mobil again advertised that they “lagged far behind those of other industries, like … banking.”

This is a repeat performance from last quarter and the foundation of a previous profile.

Once again, a media and advertising blitz by Exxon Mobil pointed fingers, not internally at their own greed, but at their comparable return on each dollar of sales. Full-page ads sponsored by the American Petroleum Institute indirectly helped the millions of merchants battling Visa and MasterCard; their message included banks’ profitability. And why not? When you fix-prices and illegally charge hundreds-of-billions of dollars in merchant interchange fees over more than a decade, it is no wonder that oil executives appear even less slick than bankers.



January 30, 2006 The Credit Card Interchange Report will be posting a commentary later this week detailing how banks are manipulating interchange fees. The nation’s largest financial instritutions, which control Visa and MasterCard are forcing merchants to process debit ATM cards at the higher credit card rates at the same time they are compensating their “advocacy groups” to promote the convienence and budgeting benefits of ATM, debit cards.

This news should especially be of interest to institutions like The Reserve Bank of Australia, which already is reviewing their own debit card network. The Green Sheet reported that the RBA, Australia’s central bank – the equivalent of the Federal Reserve in the United States – has an “eye toward revamping interchange.” They are studying their nation’s electronic payment system and POS debit networks (EFTPOS).

Our fact-based, actual customer experience will profile the banks’ overt manipulation, trickery and unethical marketing practices; it will reverberate both abroad and domestically.


Visa International to Split Up Overseas Divisions; Hedge Against Antitrust Litigation (

January 30, 2006

The Financial Times, reporting from the annual World Economic Forum in Davos, Switzerland on Jan 29th wrote that Visa International plans to split several of its overseas divisions. In part, to hedge against their exposure to billions of dollars from merchant interchange litigation.

The mega-banks which control Visa and MasterCard are knitting a plan to become more “transparent” and “independent.” While a prudent strategy looking forward, it does little to address their more than decade-long illegal price-fixing accusations. If Visa’s plan is to protect its international divisions from the litigation against Visa U.S.A. Inc., the antitrust class-action also names Visa International Service Association as a defendant.

Interestingly, this news comes less than two-days after MasterCard failed in its attempt to disqualify the lead attorneys representing the merchants in what is the largest antitrust case since the breakup of AT&T in the early 1980s.

Earlier, Visa USA announced they would elect independent, outside directors to its board, then MasterCard filed for an IPO. Now, Visa International is using the old shell game to create new entities abroad. The Credit Card Interchange Report is not surprised by this overseas shift, especially because we are aware of visits to our site from across the globe, as this is an international issue.

This added international attention, just prior to the opening ceremonies for the Winter Olympics in Italy is actually helpful to the antitrust litigation. Visa, as a global Olympic partner has amplified the current scrutiny from our unanswered question: why are merchant interchange fees in Los Angeles averaging 1.7%, yet in Torino, Italy the charge is only .70 percent?

These pursuits by Visa International are nothing more than shell games and anything but transparent as the credit card associations face hundreds of billions of dollar in damages.

The Financial Times also reported that Michael Lafferty, chairman of the International Card and Payments Council, said “a loss of tens of billions of dollars, whether through a court judgment or an expensive settlement, could bankrupt the global cards industry.” Mr. Lafferty, like everyone connected with the banks again failed to address the issue, not about the penalty, but about the illegal action of price-fixing.


Wall Street Journal: "Letter To The Editor"

January 28, 2006

[The below “letter to the editor” was submitted to the Wall Street Journal and published on Jan 28th in response to a recent WSJ commentary. Disclosure – The co-editors of The Credit Card Interchange Report are also co-owners of 30 Minute Photos Etc., which is a client of Mr. Wildfang’s law firm, Robins, Kaplan, Miller and Ciresi LLP and lead plaintiff in the interchange antitrust litigation].

Dear Editor,

Your Jan. 12 editorial “Credit Where It’s Due” ignores the undisputed facts that relate to credit card fees paid by merchants to banks, and the application of the antitrust laws to those facts. As counsel for the merchant plaintiffs in the litigation addressed in the editorial, which challenges the unlawful fixing of these charges by banks, I feel compelled to respond.

First, there is no dispute that these fees charged to merchants by card-issuing banks, so-called “interchange fees,” are set collusively by the major banks that control Visa and MasterCard. Representatives of Citibank, Chase, Bank of America, MBNA and the other mega-banks that issue credit cards meet periodically to agree upon how much all banks will charge merchants for credit card processing. Visa and MasterCard do not dispute that they do this; indeed, they claim that it is absolutely necessary to the functioning of their networks. One of the goals of the litigation is to test whether this claim is true.

Second, merchants do not deny that credit card services are valuable to merchants and to consumers. However, the fact that a product or service is valuable is no defense to a charge of price-fixing. Indeed, the principal federal antitrust law, the Sherman Act, was enacted by Congress in 1890 in part as a reaction to price-fixing by railroads of shipping charges to farmers in the Midwest for transporting their corn and wheat to distant markets. There is no doubt that the railroads provided a valuable service, compared with the horse-and-wagon alternative, but that did not permit them to collude on how much they would charge farmers.

Similarly, in today’s business world, telecommunications services, airline travel and computers are vital to U.S. businesses, but providers of those products and services are not permitted to fix prices by agreement. And I don’t think the publishers of the Wall Street Journal would agree that it would be a good thing for sellers of paper and ink, or Internet services, to agree among themselves on how much they would charge newspaper publishers for these products, even though these products are vital to newspaper publishers.

The cases recently filed by merchants are just at their beginning, but my clients are confident that the courts will ultimately conclude that the fixing of these fees by banks is unlawful. Such a finding would be good news both for merchants and consumers.

K. Craig Wildfang
Robins, Kaplan, Miller & Ciresi, LLP

Judge Denied MasterCard’s Motion to Disqualify Law Firm (

January 27, 2006

In December, MasterCard International sought to disqualify Robins, Kaplan, Miller & Ciresi LLP, as reported in the Twin Cities Pioneer Press on Jan 13. The motion also raised questions about which of two groups of attorneys will be named as the lead plaintiffs’ counsel for several retailers involved in the multibillion dollar antitrust lawsuits against Visa International and MasterCard. This forced a delay, which was resolved on Jan 27th during the New York disqualification hearing. Instead, it turned into another “price-less” moment for MasterCard.

Our scorecard is at strike two. The first decision against the credit card associations was during the multidistrict litigation venue hearings. The banks sought to have the case heard in Georgia and lost that round too.

These pauses and delays are a reminder that MasterCard will apparently do nearly anything to deflect from arguing the facts behind the illegal price-fixing violations. And for good reason. Without further delays, their planned $2.5 billion IPO could be hampered and clouded by attention from this litigation.


Credit card price fixing suit could cost industry over $100 billion, experts say (Banking Business Review)

January 27, 2006

“According to a group of prominent bankers, a lawsuit brought by retailers in the US alleging a number of major credit card issuers and banks colluded to fix processing prices will have far reaching consequences for the industry at large if it is successful…”

Click here to view the article in “Banking Business Review”