Visa Inc. V and MasterCard Inc. MA seem to have no reprieve from legal woes over ATM fees. On Thursday, the U.S. Supreme Court ruled that consumers can proceed with their class action lawsuits that accused the two companies and a number of banks of conspiring to fix inflated ATM fees.
The justices, however, dismissed two similar cases which they had previously approved for hearing. The companies had sought to challenge an Aug 2015 ruling by the District of Columbia Circuit Court of Appeals that had reinstated the three lawsuits. According to the court order, the cases were dismissed as the companies had changed their case arguments from previous petition. The court had been scheduled for oral arguments on Dec 7.
Plaintiffs, including several independent operators of ATMs and consumers, alleged that Visa and MasterCard adopted network rules which unlawfully restricted ATM operators from providing lower prices for transactions processed over networks that are not affiliated with Visa or Mastercard. These rules served the defendants as safeguard against competition from ATM networks offering lower charges. Such rules not only reduced the competition for the two companies, but also forced customers to pay artificially inflated ATM access fees.
Plaintiffs also claimed that the rules benefited the major banks - Bank of America Corp. BAC , JPMorgan Chase & Co. JPM and Wells Fargo & Company WFC - which held stakes in MasterCard and Visa. The suit claimed that even after MasterCard and Visa went public in 2006 and 2008, respectively, the ATM rules remained unchanged.
Currently, Visa carries a Zacks #3 (Hold), while MasterCard carries Zacks #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .
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