Consumers across the US can use the Internet to buy products from foreign countries. But the complaint for this class action alleges TD Bank, NA violates its Visa credit card agreements in the foreign exchange rates it charges customers on their overseas purchases. The complaint claims that TD Bank does not charge customers the promised rate and that sometimes no currency has been exchanged at all.
The Nationwide Class for this action is all persons or entities with a Visa payment card with TD Bank, who made a transaction in a foreign currency using the card within the applicable statute of limitations, where the exchange rate imposed was not a government-mandated rate. An alternative Massachusetts Class has also been defined, for cardholders living in Massachusetts.
Visa does not issue credit cards directly to consumers. Rather, financial institutions issue them, and Visa acts as processor. It also imposes certain rules on the issuers. The complaint alleges, “These rules provide, inter alia, that the foreign exchange (‘FX’) rates applied to consumer payment card transactions in foreign currencies for each day will either be wholesale FX market rates or a government-mandated rate where applicable. The vast majority of jurisdictions do not have government-mandated rates.”
TD Bank passes these terms on to customers with its agreements, the complaint alleges, “promising their cardholders … that the FX rates applied to foreign transactions will be either wholesale market rates or, in jurisdictions that have them, government-mandated rates.”
Yet the complaint contends that the rates applied to FX cardholder transactions are not FX wholesale rates. It also claims, “Further, even when the FX rates imposed by Visa are within the trading ranges of the individual currencies within the wholesale market for the applicable dates, the methods by which the rates are imposed are unfair, in bad faith, and therefore in violation of the Cardholder Agreements and Deposit Account Agreements.”
Consumers believe that the FX rates charged are similar to the rates the processors and banks pay when they process the transactions. However, the complaint says this may not be true: “In fact … the banks and Processors rarely engage in wholesale market transactions to facilitate the cardholders’ transactions.” They are instead settled in US dollars, with no foreign currency exchanged at all. “In these instances, the need for any currency conversion is a pure fiction, and any hidden charge for the same, and/or the manipulation of FX rates in breach of the Credit Card Agreements, is unlawful.”
Even when transactions are settled in foreign currencies, the complaint claims that “the need for currency exchange is minimal. Visa is engaged in multilateral global transactions on a massive scale (i.e., doing multiple transactions in both directions—e.g., U.S. Dollars to Euros, and Euros to U.S. Dollars).” The processors therefore only need to exchange currencies for settling remaining net amounts.
The complaint alleges that many of the amounts charged to customers for foreign currency exchange “are largely a fiction[,]” the complaint claims.
Article Type: LawsuitTopic: Consumer
Most Recent Case Event
TD Bank Visa Credit Cards Foreign Exchange Rates Complaint
July 9, 2021
Consumers across the US can use the Internet to buy products from foreign countries. But the complaint for this class action alleges TD Bank, NA violates its Visa credit card agreements in the foreign exchange rates it charges customers on their overseas purchases. The complaint claims that TD Bank does not charge customers the promised rate and that sometimes no currency has been exchanged at all.
TD Bank Visa Credit Cards Foreign Exchange Rates ComplaintCase Event History
TD Bank Visa Credit Cards Foreign Exchange Rates Complaint
July 9, 2021
Consumers across the US can use the Internet to buy products from foreign countries. But the complaint for this class action alleges TD Bank, NA violates its Visa credit card agreements in the foreign exchange rates it charges customers on their overseas purchases. The complaint claims that TD Bank does not charge customers the promised rate and that sometimes no currency has been exchanged at all.
TD Bank Visa Credit Cards Foreign Exchange Rates Complaint