Originally published March 14 2005
Class action suit files against credit card company
by Mike Adams, the Health Ranger, NaturalNews Editor
American Express is being sued by a group of merchants who allege that the company forced them to accept all the credit products in its line. There have been a number of previous suits on the same grounds against Visa, MasterCard, AmEx and Discover. AmEx won a victory in a previous suit. The merchants contend that AmEx's high fees on certain credit lines are harmful to their businesses.
A group of merchants is preparing a class action antitrust suit against a credit card company for pressuring merchants into accepting all the card products it offers, despite the higher fees it charges for some transactions.
Now that the Visa/MasterCard antitrust matter is settled (see "Supreme Court Decides Against Visa, MasterCard in Six-year Antitrust Suit," The Green Sheet, Oct. 25, 2004, issue 04:10:02), and former plaintiffs American Express Co. (AmEx) and Discover Financial Services celebrate victories, the tables have turned on AmEx.
Attorneys representing merchants across the country say that the tying agreements AmEx imposes on merchants to accept all of its products are illegal, as are the arbitration clauses it enforces.
Now that AmEx is able to link its brand with such large commercial banks as Citi and MBNA, two of the three largest issuing banks in the country, the question of interchange fees becomes a huge factor for merchants.
According to Gary B. Friedman, lead attorney for the plaintiffs and a partner with the law firm Friedman & Shube of New York City, the higher interchange fees merchants must pay to accept AmEx-branded revolving credit cards from their customers are harmful to their businesses.
With AmEx's well-publicized entry into the credit card business, in contrast with its more traditional charge card products, merchants may end up paying higher fees for cards that AmEx requires them to accept if they want to accept any at all.
"These branded cards carry higher fees, and merchants are distressed about the rates they're charged by American Express."
According to Friedman, these clauses would bar small merchants, and only small merchants, from participating in class actions, even while AmEx's policies hit those businesses the hardest.
All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing LLC takes sole responsibility for all content. Truth Publishing sells no hard products and earns no money from the recommendation of products. NaturalNews.com is presented for educational and commentary purposes only and should not be construed as professional advice from any licensed practitioner. Truth Publishing assumes no responsibility for the use or misuse of this material. For the full terms of usage of this material, visit www.NaturalNews.com/terms.shtml