A class action suit filed by a Tiburon man and his wife accuse four major banks of conspiring to collect more than $50 billion annually from credit card and debit card users. If successful, this lawsuit could strike at the core of an entire industry.
Tiburon resident Ned Lawrence enjoys the benefits of using his credit and debit cards on his frequent travels.
"We've traveled all around the world. We both had a chance to travel. We've been to Europe. We've been to Peru. I've been to Machu Picchu. I've been to India," Edwards said.
So, when he learned the banks take about three percent out of his payment to the merchant he was shocked.
"I don't think that any of the consumers knew that this percentage was being taken from the consumer. Without knowing anything about it, I can only assume it was a hidden fund," Edwards said.
The banks named in the lawsuit are Bank of America, JP Morgan Chase, Capitol One and HSBC.
Attorney Joseph Alioto says you may have heard the banks charge merchants a percentage of each purchase on a credit card.
But he contends they're actually charging you.
"You pay a hidden fee to the banks that are handling it and by the way, it's not to cover their costs. They have a different fee for that," Attorney Joseph Alioto said.
The lawsuit further charges that the banks jointly have agreed to charge the consumer the same amount and to hide it from them.
"They try to compete on everything except this fee, which they have agreed to hide and keep secret from the consumers," Alioto said.
Edwards says that's the part that bothers him the most.
The fact that they didn't tell me, took the money without telling me and agreed amongst themselves to take this money, that's the part that really bothers me," Edwards said.
Bank of America and HSBC told 7 On Your Side they had no comment. Capitol One and Chase did not return our calls and e-mails for comment.
