The lawsuit claims that the credit card companies breached their contract, their implied covenant of good faith and fair dealing and their duty of care and fiduciary duty as banking institutions by failing to take appropriate measures in addressing fraud and theft in the internet, telephone and mail order industry.
It further alleges that Visa and MasterCard failed to disclose certain "supra competitive transactional and penalty fees" to merchants and forced the merchants to pay such fees with the abuse of their monopolistic powers.
Moreover, many of these fees were only stated in their unpublished rules and regulations, which were never disclosed to merchants at the time of contracting.
Finally, the complaint alleges that in “cybershoplifting” scenarios, the merchant is powerless to prevent the credit card companies from debiting penalty fees – or 'charge-back' fees – from their merchant accounts.
As a result of these unlawful acts, according to the complaint, internet, telephone and mail order merchants have paid virtually all of the costs associated with fraud and theft in their industry while Visa, MasterCard, American Express and Discover (the fourth named defendant) made millions of dollars "from their supra competitive transactional and penalty fees."
Mark Ishman of The Triangle Law Center, a North Carolina based law firm, announced that the class action has commenced on behalf of all internet, telephone and mail order merchants. Those merchants wishing to join the action can do so at ishmanlaw.com.
