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Credit Card Foreign Transaction Fee Settlement

A bit on NPR just reminded me of a bit of paperwork that I have to complete. Well, me and maybe 30 million other people. As you may already know, there is a proposed settlement for a pending class action suit involving anyone who made a foreign purchase with a credit card between February 1, 1996 and November 8, 2006. Assuming that the proposed settlement is approved by the court, class members will received a refund of part of the foreign transaction fee that was charged any time they used a US credit card outside of the US.

I received my first notice about this some time ago. However, I didn’t think I’d end up taking advantage of it, as you not only had to know when you traveled, but you had to have your actual credit card records substantiating each transaction. I don’t know about you, but I don’t keep my credit cards records for 10+ years. I know what I did last year. 1997? Not so clear.

However, the most recent settlement draft seems to have simplified things greatly. Roughly, you can:

  1. take a straight $25 settlement if you traveled outside the US at least once in this period (and simply swear to that fact);
  2. get a somewhat larger settlement based on a declaration of how many total days you spent outside the US during that period (the settlement will be based on an estimated average figured out by the credit card companies and class action representatives); or
  3. provide a substantiated record of how much money you actually spent outside of the US during that period, and receive a refund of the fees actually charged.

I suspect I’d probably end up with a larger settlement if I could substantiate all of my spending, but that would involve such a ridiculous amount of time and effort that I’m going to opt for option 2 (which, for the most part, is simply a matter of going through my passports and deciphering the visa stamps). I encourage fellow travelers to take the time to participate in this settlement. It was conventional wisdom (encouraged by the credit card companies) that you received the best exchange rate by using your credit card overseas. While that may be technically true, their tacking on of unpublicized fees certainly made that a moot point. Make sure they have to pay for that deception.

More info at the official settlement site (tho’ really, doesn’t that look like a scam site? It’s not.) Court approval of the settlement could come, at the earliest, on March 31st. Checks go out after approval.

Also, this is not legal advice, I am not your lawyer, etc.

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12 Comments

  1. Going online to fill this out right now.

  2. April

    I got the same packet you did, but after reading all the legal mumbo jumbo (and since I’m an attorney I’ve read a lot of mumbo jumbo) I decided that even though I spent almost a month in France two summers ago, trying to dig out my old American Express and other records to document my entitlement to fees simply wasn’t going to be worth the time to get the additional funds I would get above the $25. In fact, I didn’t even bother taking the time to fill out the $25 form thinking my time was worth more than that. This is a prime example of how ridicuous the whole Class Action Lawsuit procedures have become….The people intended to benefit from the litigation take home a coupon or a minor settlement, while the plaintiff’s lawyers take home ENORMOUS sums in statutory attorneys’ fees. Many times the people whom they represent don’t bother to even claim their pittance. The lawyers were the only people to win in this bit of cumbersome and expensive litigation, which is typical of these “consumer class action” lawsuits.

  3. MB

    That’s my gut reaction, too, April, but then I try to figure out the alternatives. The coupon settlements are ridiculous – I especially love the ones where you’re offered $x towards another product from the company that just ripped you off. Uh, no thanks. But honestly, most of these things are low-dollar value offences, when you take it individually and often don’t seem worth our time. However, that’s exactly why it can be worth it to companies to commit these low-value offences – not enough to get you or I to move, but it results in a lot of extra $$$ in the pocket of the offender. So yes, I do think the class action system serves a good purpose. The attorney comp in these matters . . .well, I honestly don’t know how to fix that. It is, by nature, contingency work. I don’t really begrugde PI lawyers their percentage, so I suppose I don’t really find it all that offensive here, either. What I would like to see, however, is more supervision by the court in assuring that the class action plaintiffs actually do secure value for the class members (going back to the stupid coupon things).

  4. April

    Mark, I know the argument can be made that since recovery is speculative a handsome payment to the attorneys either via contingent fees or statutory attorneys fees is in order. But when I get these things I am always astounded at the terrible waste of expenses…It probably cost close to the $25 “no questions asked” recovery I could get to put together that information packet (attorney and paralegal time) and mail it to me by first class mail. Even if I wanted to take the most simple option ($25) it would probaby take over an hour of my time just to dig out the plane tickets if I still have them to prove I even went abroad, or to contact the credit card company which handled the ticket transaction. I wish there were an option in these stupid settlements to donate the money to a consumer protection charity of some sort. I’d gladly give away my entitlement rather than just not bothering to do all the paperwork.

  5. SJG

    You guys are funny. You talk about it not being worth your time – for the $25, it takes maybe all of a minute online – you may be good attorneys and all but $25/minute is really an excellent rate. Fill out the form April! – I agree with MB – the more people that fill out the claim, the less they get to keep- By your not filing for the claim, it doesn’t prevent their attorneys from still getting their millions, anyway so go for it.

  6. Kent

    I’ve had extensive travel outside the U.S. during that period and have my records, so I looked at the third option that they recommended would give me the best return. The sticking point, however, is that they want all of my bank and credit card names and ACCOUNT NUMBERS! Is this a scam? How do I verify that this as a legitimate operation. I can understand that they might want to see proof, if I’m audited, but any good attorney should know better than to tell people to send such information to unsolicited individuals that you don’t know!

  7. MB

    I’ve seen a lot of people say that, Kent. And I have to agree – it doesn’t exactly inspire confidence.

  8. LJ

    Anything that credit card companies have to pay back to consumers for their ruthless fee and interest rate gouging is worth it. I spent over 700 days traveling outside the U.S. I opted for option 2 because, like others, I doubt much would be left over after the lawyers get their 27.5% with interest of the $313,000,000 settlement. I’m sure it’s just a drop in the bucket for the creditors (what is it like Visa, MC, Discovery, etc.) but still, anything is better than nothing. Legal loan sharks!

  9. TM

    Does anyone know the formula they will use to calculate the average daily spending estimate for Option 2?

  10. Carol

    Can anyone suggest a card that doesn’t have fees — I have lived overseas for 11 years and make ‘foreign’ transactions regularly… foreign banks (I am in Spain) have huge fees as well…

  11. I am finding that many people are confused about what to do. Applying for the settlement is fiarly easy. Go to http://www.ccfsettlement.com

    The site has a lot of information, but if you click on “Submit Claim Form” link on the first page, you will go straight to the submission forms. The options are clearly spelled out.

    In Option 1, you are taking a simple $25 settlement, which is recommended especially for those who were out of the country for a week or less.

    In Option 2, you are estimating the number of days you were overseas. An algorithm is used to estimate your typical expenditures. But note that the refund is based on a 1% foreign transaction fee. Many cards charged a 3% foreign transaction fee. So you will need to decide if this is a good option for you.

    In option 3, you give your exact expenditures and your refund will be the exact amount charged to you. This is especially a good option if you had large expenditures overseas. If you need your bank statements, banks will give them to you for free, but keep in mind that the deadline o submit your application is before May 30.

  12. fran scarito

    I looked at the website about two years ago and learned it wasn’t settled yet. All I want is the settlememt and a check for more than $50 but those lawyers never seem to settle and distribute. I lost the address of the actual website.

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