If you traveled abroad and used a Diners Club, MasterCard or VISA ATM, credit or debit card between February 1, 1996 and November 8, 2006 while on your trip you could be getting an early Christmas gift in the mail… well, some Christmas anyway.
Let me explain. In the next few days more than 20 million travelers will be receiving notices from a New York federal court regarding potential refunds for some of the foreign currency exchange fees paid using the credit and debit cards I listed above. If you qualify you can expect a minimum payment of $25, which covers all cards 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. In July 2006 the case was settled for $336 million settlement. Final approval will be considered at a hearing on March 31, 2008, and cardholders must apply by May 30, 2008 for refunds.
If you receive one of these notices in the mail you have three options:
1. Take a $25 “easy refund.” Lawyers handling the settlement say this is the most popular option and accounts for about 70% of an estimated 2.5 million claims that have already been submitted.
2. If you made foreign transactions of at least $2,500 during the 10-year period you can request a refund of up to 1% of those purchases.
3. This option is recommended for frequent travelers who can supply detailed yearly information. It provides refunds of up to 3% of foreign transactions. You aren’t required to submit supporting documents but must estimate annual foreign transactions.
Regardless of what option you choose, don’t look for a check anytime soon because refunds won’t be made until a court makes a final ruling and all appeals are heard—which could take years.
You should also know that lawyers are requesting 27.5% of the settlement, which according to the settlement website, means that you could wind up with a partial refund.
For more information on the settlement click here.
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