$500M Discover Merchant Class Action Settlement

If you accepted or processed Discover credit cards between 2007 and 2023, you may be eligible to claim a payment from a class action settlement.

Discover Financial Services has agreed to pay $500,000,000 to settle a class action lawsuit for allegedly misclassifying certain consumer credit cards as commercial credit cards, leading to excessive interchange fees for merchants.

Who are eligible for payouts?

The class members, who are eligible for payouts, include:

• End Merchants: Individuals or businesses that accepted Discover Bank-issued credit cards directly from customers in exchange for goods or services.
• Merchant Acquirers: Entities that facilitated Discover credit card transactions under Discover's rules.
• Payment Intermediaries: Entities that processed Discover credit card transactions on behalf of other businesses.

These class members are categorized into four types:

• Indirect End Merchant
• Inactive Direct End Merchant
• Managed Active Direct End Merchant
• Unmanaged Active Direct End Merchant

How much can class members get?

Class members can receive payments based on several factors, including the estimated interchange fee overcharge for each Discover merchant identifier associated with them. The settlement amount ranges from $500 million to the total settlement payout.

• End Merchants: Payments are calculated based on the interchange fee overcharge and how these charges were allocated among entities.
• Merchant Acquirers and Payment Intermediaries: Payments depend on the additional information provided and validated by the Settlement Administrator.

How to claim an award

To claim an award, class members must submit a claim form by the deadline. Claims can be filed online or by mailing the form to Discover Merchant Settlement, PO Box 0000, Portland OR 97208-0000.

The claim forms and portal will go live on January 20, 2025.

Payment methods

• Payments will be mailed as checks
• Electronic payment options are available upon request

$500 Million settlement fund

The settlement fund of $500,000,000 will cover:

• Payments to eligible class members
• Attorneys' fees, not exceeding $25 million
• Reimbursement of litigation expenses, not exceeding $1 million
• Service awards of up to $7,500 for each of the five Settlement Class Representatives

Important dates

• Deadline to File a Claim: TBD

When is the Discover Card Merchant Settlement payout date?

Awards will be paid to eligible class members once the settlement is approved by the Court and becomes final.

Why is there a class action settlement?

The class action lawsuit was initiated because Discover allegedly misclassified consumer credit cards as commercial cards, resulting in higher interchange fees for merchants. The settlement aims to resolve these claims without the uncertainties of continued litigation.