By Laura Bly, USA TODAY
More than 20 million travelers are getting early presents in the mail this holiday season: notices from a New York federal court about potential refunds for some of the foreign currency exchange fees they paid while using a Diners Club, MasterCard or Visa ATM, credit or debit card between Feb. 1, 1996, and Nov. 8, 2006.
Claimants can expect a minimum payment of $25, which covers all cards a consumer used during the 10-year period. The refunds are part of a class-action lawsuit that contends the card companies and seven issuing banks (Bank of America, Bank One/First USA, Chase, Citibank, HSBC/Household, MBNA and Washington Mutual/Providian) overcharged customers and didn't adequately disclose their foreign transaction fees. Such fees are typically 1% to 3% of purchases made outside the USA, and also apply to Internet purchases made in another currency.
A $336 million settlement in the case was announced in July 2006 and preliminarily approved by a court in November 2006. Final approval will be considered at a hearing on March 31, 2008, and cardholders must apply by May 30 of next year for refunds. The defendants denied wrongdoing but said they settled to avoid the expense and uncertainty of litigation.
Consumers who mail or file a claim online at
http://ccfsettlement.com/ have three options:
• A $25 "easy refund" is most popular, accounting for about 70% of an estimated 2.5 million claims submitted since the first notices were mailed in late November, says Merrill Davidoff, an attorney with Philadelphia's Berger & Montague, one of the law firms handling the settlement
• Cardholders who had foreign transactions of at least $2,500 over the 10-year period can request a refund of up to 1% of those purchases, using a formula based on typical spending and how many days they spent outside the USA.
• The third alternative, recommended for frequent travelers who can supply year-by-year information, provides refunds of up to 3% of foreign transactions. Travelers aren't required to submit supporting documents but must estimate annual foreign transactions. Under the terms of the settlement, card issuers must provide consumers free copies of their monthly statements if available electronically, a capability which typically extends back to 2002 or 2003, Davidoff says.
Luke Ronsse of
http://www.Travelfinances.com says he has received a "tidal wave of questions" about the refunds, many from readers worried the letters were part of a scam.
Among the concerns: Who gets paid when, and what happens if the settlement money runs out?
Don't look for a check anytime soon, because refunds (paid to the primary cardholder) won't be made until final court approval and settlement of any appeals — which could take years. Lawyers are requesting 27.5% of the $313 million expected to remain after administrative costs, and the settlement website says consumers could wind up with a partial refund.
If claims outstrip available money, payments will be trimmed on a pro-rated basis. Claims of more than $225 would be cut first by up to 50%, to a minimum of $225. Next, claims from $25.01 to $225 would be reduced by up to 50%, to a $25 minimum. "Any reductions are designed to ensure that every claimant receives a refund," and refunds that may fall below $25 will be a "last resort," the settlement site adds.
That possibility "is not going to go over well" with travelers who may have several thousand dollars in claims, Ronsse says. Because the fees apply to any foreign purchase, he adds, "the forms indicate you could have bought a bottle of Canadian maple syrup online and still be eligible for a $25 refund."
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You should still be able to find a copy at just about any newspapaper rack. I don't have my copy anymore. It had general info about the settlement.....don't really remember the particulars.
