[The Practical Nomad Newsletter] Money for travellers

[Edward Hasbrouck]

http://hasbrouck.org/blog/archives/001392.html

Money for travellers from class action lawsuit
(this is not spam!)

===============================================

If you are from the USA, and reading this newsletter, you are probably  
eligible to get some money from a class action lawsuit you might not  
have heard about.

You can get at least $25 for the asking (and maybe many times more) if  
at any time between 1996 and 2006 you used a card with a Visa or  
MasterCard logo to make a purchase or withdraw money from an ATM in  
any country other than the USA (yes, including Canada and Mexico)  
and/or in any currency other than US dollars.

To get your money, you need to file a claim by 30 May 2008. If you do  
nothing, you'll get nothing. The Web site for filing claims looks like  
a "phishing" scam. But I'm pretty certain it's legitimate.:

https://www.ccfsettlement.com/claim/?action=choose

Start working on your claim now. It might be simple, but it might take  
some time to get the necessary information, particularly if you are on  
the road or abroad now.

You can file a claim online for your choice of either:

(1) A minimum of $25, regardless of how much you spent (as long as you  
spent anything at all on any Visa or MasterCard outside the USA or in  
foreign currency)

(2) An estimated amount based on the number of days you have spent  
outside the USA from 1 February 1996 through 8 November 2006

(3) An amount based on your total documented charges outside the USA  
and/or in foreign currency with Visa and MasterCard credit, debit, and  
ATM cards during that period, if you can show your records of those  
charges

If, like most people, you don't have complete records of your credit  
card bills for the last 12 years, and if the money is fairly allocated  
(it might not be -- more on that below), most people who've spent a  
cumulative total of a month or more abroad should get the largest  
refund with the least effort to prepare their claim under Option 2.

Under Option 2, you'll get an "estimate" of 1% of your total spending  
abroad. I'm guessing that might be as much as dollar for each day you  
spent abroad. If you took a year-long trip around the world in the  
last decade, or lived abroad for a year, you might have several  
hundred dollars coming!

You might have gotten a fine-print notice in the mail about this. (I  
didn't, because I'm travelling and receive my bills online.) But if  
you didn't get it or threw it away, don't worry; You don't need the  
notice to file a claim.

To file a claim under Option 2, you need:

(1) The card number and name of the issuing bank for any one Visa or  
MasterCard that you used abroad and/or for a purchase in foreign  
currency between 1 February 1996 through 8 November 2006

(2) The cumulative total number of days you spent outside the USA  
during that time

It doesn't matter how many cards you had, whether they are still  
active, how much you actually spent, or whether you took 10 trips of  
10 days each, or 1 trip of 100 days. You just need the card number and  
name of the issuer for one card you are sure you used at least once  
while abroad or with a foreign merchant, and the total number of days  
you were abroad.

So go file your claim. Now.

Back already? Good.

Now that you've filed your claim, here's more about what's happened,  
what's still wrong, what I'm doing to try to get it fixed, and what  
you can do to help:

Banks and credit card companies charge currency conversion fees when  
you make purchases or withdraw money from an ATM in a currency other  
than the one in which you are billed (almost always US dollars, if  
your cards are issued in the USA). Those fees are typically no more  
than half what retail money-changers charge to change money between  
currencies (with a lot of variation between banks), so it is usually a  
pretty good deal.

But for years, banks in the USA have been accused of conspiring to fix  
those fees, and of hiding them from consumers rather than itemizing  
them clearly.

(Similar things happen with ATM fees when you use your cards abroad.  
My bank promises to reimburse other banks' fees for using their ATM's.  
They do, automatically, when I use other bank's ATM's in the USA: But  
when I'm abroad, the fees are rarely itemized on my statement, or  
reimbursed automatically. Every few months while I'm abroad I have to  
call my bank to get them to research and credit the latest batch of  
ATM fees from foreign banks.)

Eventually, a bunch of people sued the card-issuing banks, Visa, and  
MasterCard. (And Diners Club, which is also included in the  
settlement, although I don't know many people who use it.)

The banks don't admit they did anything wrong, but they've agreed to  
fork over a third of a billion dollars to cardholders (and the lawyers  
who brought the suit) to settle these claims.

So far, so good.

The problem is is figuring out how to divvy up the pot. Most people  
don't keep complete credit card billing records and bank statements  
that old, especially for closed accounts. And people living and  
travelling abroad are among those least likely to have kept, or to  
have immediate access to, those sorts of records.

So the proposed settlement includes Option 2, which is intended to  
estimate how much you spent by credit, debit, or ATM card abroad,  
based on answers to a few simple questions.

Still so far, so good.

The problem is in choosing which small number of simple, easily  
answered questions will provide the best basis for an estimate, and  
determining what algorithm will best translate the answers to those  
questions into fair estimates and a fair allocation of the settlment  
among the millions of claimants.

That's a diificult task, calling for considerable research into travel  
and traveller demographics, segmentation, and spending and payment  
method patterns. Not easy, but the lawyers are asking for more than  
$75 million of the settlement money. For that, they should have been  
able to afford plenty of help from travel experts.

Unfortunately, the lawyers have little reason to care how the remains  
of the settlement are divided up, once they have taken their $75  
million off the top. (The 20 named plaintiffs don't have much reason  
to care, either: they each get an average of $17,500.) And they appear  
neither to have, nor to have hired, anyone competent to devise a fair  
algorithm or allocation plan.

The settlement Web site mentions (deeply buried) the existence of the  
Option 2 algorithm, but says nothing about what it is. So in order to  
figure out how much I would get under Option 2, and whether it would  
be worth the effort and expense to make an Option 3 claim (which  
requires complete records of all claimed bills and charges), I wrote  
to the lawyers representing me and all the other members of the class  
of cardholders, to get them to tell me the algorithm and post it  
online for everyone who needed it to prepare their claim.

To my surprise, the lawyers' eventual answer (after repeated written  
and telephone follow-ups over several weeks) was that not only has the  
algorithm not yet been determined, but they had no information at all  
on which I could base even an informed guess as to what it might  
eventually be determined to be! If that's true, it means that it's  
impossible to predict whether the settlement allocation will be fair.  
(And if it's false, it means the lawyers are lying to, and withholding  
essential information from, their clients. For this they deserve $75  
million?)

Worse, the "advice" they tried to give me was patently wrong, and  
betrayed naive (and wrong) assumptions and a complete lack of  
understanding, much less expertise, about the different types of  
travellers, travel behavior, and travel spending and modes of payment.

Looking more closely at the Option 2 claim form, and the lawyers'  
advice, it became apparent that the settlement allocation would likely  
be systematically unfair. My detailed analysis is in the formal  
objections I'm submitting to the Court that has to decide whether to  
approve the proposed settlement, allocation plan, and lawyers' fees:

http://hasbrouck.org/articles/ccfsettlement-objection.pdf

Some of my conclusions about the nature of the unfairness, as stated  
to the Court, are as follows:

"Those with the largest claims are, of course, those who have lived  
abroad or travelled abroad for extended periods. Those likely to  
benefit unfairly from any algorithm based on the questions on the  
Option 2 claim form (which asks only about cumulative time abroad and  
trip purpose) are those who paid for few of their costs with merchants  
abroad with their personal US-issued cards. These would include  
particularly large numbers of those sent abroad by governmental or  
large corporate sponsors: military personnel on bases overseas and oil  
and gas workers on closed worksites, with few opportunities for local  
spending abroad; those living abroad in other government- or  
employer-paid housing; and those able to open bank accounts abroad  
from which to pay living expense while abroad (which is usually  
difficult without assistance, most often that of a corporate employer)

"Those likely to be unfairly disadvantaged by the same algorithm are  
those who travelled or lived abroad on their own, who typically find  
it impossible to open a local bank account, cannot carry cash or  
travellers' checks sufficient for an extended stay, and of necessity  
pay almost all of their expenses either with US-issued cards or with  
local currency withdrawn from ATM's abroad with US-issued cards, often  
Visa- or MasterCard-branded.

"Whether people were abroad under government or corporate sponsorship  
and employment, or on their own, thus may be a better indicator of  
foreign currency card usage than whether they were abroad for business  
or pleasure."

If you want to join me in objecting to the proposed settlement, you  
can do so without a lawyer (or with a lawyer, but it isn't required)  
by mailing a letter to the Court and the two lead lawyers for the  
class , with your letter postmarked by this Thursday, 14 March 2008:

http://www.ccfsettlement.com/faqs/#idQ14

If you don't want a third of a billion dollars, in which you share an  
interest, to be divided up in a completely secret, unpredictable, and  
probably unfair way, ask the Court to postpone its approval of the  
settlement, allocation plan, and award of attorneys' fees until the  
algorithm for Option 2 is disclosed to the members of the class, and  
can be evaluated for fairness.

A Federal District Court judge in New York City is scheduled to hold a  
hearing on Monday, 31 March 2008 on whether to approve the proposed  
settlement:

http://www.ccfsettlement.com/faqs/#idQ39

Anyone can attend, but if you want to speak, you have to include a  
notice of your intent to appear with the letter stating your  
objections. I don't expect to be able to attend the hearing myself (I  
expect to be in the air, on a flight between Cairo and Dubai), but if  
any of my readers can attend, I'd love to hear what happens.

I'm off to bed, to get woken up at 1:30 a.m to be at the airport in  
Istanbul at 3 a.m. to check in for a 6 a.m. flight to Doha, Qatar.   
Bon voyage to all,

Edward Hasbrouck

-- 
Edward Hasbrouck
<edward at hasbrouck.org>
<http://hasbrouck.org>
+1-415-824-0214

"The Practical Nomad: How to Travel Around the World"
(4th edition 2007)
"The Practical Nomad Guide to the Online Travel Marketplace"
<http://www.practicalnomad.com>

Around-the-World and multi-stop international air tickets:
http://www.airtreks.com/tools/landing.php?ref=EH&dst=MAIN