MasterCard faces £14bn compensation bill for 'excessive charges' in UK's biggest ever damages case

Around 46 million people Britain could claim refunds for fees charged between 1992 and 2008.

The credit card firm fighting legal action that could cost it up to £14bn in compensation payouts (Bloomberg News)

About 40 million people in Britain could potentially be owed hundreds of pounds each in compensation by Mastercard after a law suit demanding £14 billion in damages was filed accusing the company of charging excessive fees, according to court documents.

The case brought by a former chief financial services ombudsman alleges the payments company set unlawfully high fees charged to stores when shoppers swipe their debit or credit cards that were passed on to consumers in higher prices.

Mastercard was accused of doing this for 16 years between 1992 and 2008, according to the documents filed at the Competition Appeal Tribunal on Thursday.

The company said in a statement it denied any wrongdoing.

“We continue to firmly disagree with the basis of this claim and we intend to oppose it vigorously,” the world's second-largest credit card and debit card issuer said.

The lawsuit comes after the European Union's antitrust regulator found in 2014 Mastercard's fees to store owners to process payments were excessive.

Law firm Quinn Emanuel said the lawsuit was the largest damages claim in British history and would be brought under a law meaning consumers would automatically be claimants unless they opt out.

“MasterCard charged billion of pounds of unlawfully high fees for its sole benefit and to the detriment of consumers,” Walter Merricks, who is bringing the case, said in a statement.

“The filing of this claim is the first step towards consumers obtaining compensation.”

Merricks was head of the Financial Ombudsman Service for ten years until 2009, helping to settle disputes between consumers and financial services companies.

Consumers no longer living in Britain, but who lived there between 1992 and 2008, can opt in to the collective claim.

Reuters