We hear stories every day about the devastating impact consumer debt has on a family. We are pleased with any decision that keeps costs down for consumers.
Baltimore, MD (Vocus) October 7, 2010
The Department of Justice announced yesterday that it filed a civil antitrust lawsuit challenging rules that American Express, MasterCard and Visa have in place that prevent merchants from offering consumers discounts, rewards and information about card costs, ultimately resulting in higher costs to consumers. Joining the department in its lawsuit are the states of Connecticut, Iowa, Maryland, Michigan, Missouri, Ohio and Texas. The case is U.S. v. American Express, 10-4496, U.S. District Court, Eastern District of New York (Brooklyn).
At the same time, the Justice Department announced that it has reached a proposed settlement with Visa and MasterCard that, if approved by the court, would require the two companies to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly.
Persels & Associates, a national law firm based in Towson, Maryland is on the front lines helping consumers work with credit card companies to restructure unsecured debt payments. Persels & Associates, LLC provides representation for over 50,000 clients with a staff of over 25 in the Persels central office and 200 field attorneys accepting clients licensed in 47 states.
“We want to put more money in consumers’ pockets, and by eliminating credit card companies’ anticompetitive rules, we will accomplish that.” Attorney general Eric Holder said in the Department of Justice release.
“We hear stories every day about the devastating impact consumer debt has on a family,” said Persels Operations Manager Joe Cosentini. “We are pleased with any decision that keeps costs down for consumers.”
Persels & Associates and its predecessors have been working with clients to restructure unsecured debt payments for over 10 years. The law firm bridges the "gap" that can exist between the consumers and creditors. The firm’s ability to provide legal advice and negotiate payments consumers can afford can be essential to people working their way out of debt.
Credit card acceptance costs U.S. merchants approximately $35 billion each year. Those costs are collected from merchants in the form of a “swipe fee” they pay every time a credit card is used. American Express has the highest merchant fees of any credit card network. Merchants pass on these billions of dollars in fees to all their consumers in the form of higher retail prices. By preventing merchants from rewarding consumers when they use less expensive credit cards to make a purchase, American Express, MasterCard and Visa have inhibited merchants’ ability to reduce card acceptance costs, and therefore their retail prices to consumers.
The proposed settlement requires MasterCard and Visa to allow their merchants to:
- Offer consumers an immediate discount or rebate or a free or discounted product or service for using a particular credit card network, low-cost card within that network or other form of payment;
- Express a preference for the use of a particular credit card network, low-cost card within that network or other form of payment;
- Promote a particular credit card network, low-cost card within that network or other form of payment through posted information or other communications to consumers; and
- Communicate to consumers the cost incurred by the merchant when a consumer uses a particular credit card network, type of card within that network, or other form of payment
- The proposed settlement allows any merchant that only accepts Visa and MasterCard to take advantage of the relief immediately.
“With employments rates still high, many Americans still have to rely on their credit cards to make ends meet,” Cosentini said. “Hopefully our clients and all consumers will see lower prices as soon as possible.”
About Persels & Associates
Persels & Associates, LLC, and its entities are pioneers in the field of offering "unbundled" legal services to individuals who cannot afford traditional legal services. As Americans credit debt rose, Persels & Associates bridged the "gap" between consumers and their debtors. Today Persels & Associates provides representation for over 50,000 clients with a staff of over 200 field attorneys accepting clients in 47 states and 25 central office staff attorneys. For more information, please visit http://www.perselsandassociates.com.