The settlement of the Visa and MasterCard class action interchange swipe fee case has spawned a new type of company—the third-party claims filing company.

As with most new ventures, controversy is arising. In fact, the court and counsel for the plaintiffs in the case are trying to modify the communications of these new players, which need to be aware of how they are marketing their services to merchants.

Visa and MasterCard have created a pool of billions of dollars to distribute to merchants in the swipe fee class. New companies have formed—mostly by class action lawyers and entreprenuers—to help merchants navigate the settlement process. These companies are legal and the court has acknowledged that. The issue is some of the companies have been marketing their services in ways that counsel for the plaintiffs find objectionable.

Late last year, counsel for the plaintiffs began sending these new companies letters objecting to their marketing techniques. One of the objections was that some of the companies made statements like “you have to register to be included” or otherwise inferring that the merchant must take some sort of action now or lose their right to any part of the settlement.

However, as in most class action settlements, counsel for the plaintiff usually gets most of the information about who is supposed to be part of the class from the defendants. During the discovery process, the plaintiffs’ counsel requests information that enables them to identify class participants, including their addresses. So most of the people that have a claim will be identified in that manner. If you want to make sure you are included in the class as a merchant, go to the official court-approved website and provide your name and contact information.

The counsel for the plaintiffs also noted that third-party recovery firms allege in their marketing that merchants would have a difficult time determining how much they should receive in the settlement. However, that appears contrary to the anticipated procedure, which indicates the claims form will determine the settlement amount and provide it to the merchants.

Papers have been filed with the court asking it to address the marketing activities of the third-party claims filing companies. As a result, in an order filed Dec. 20, the court “determined that certain solicitations of class members regarding third-party claims filing services has been misleading” and ordered disclosures to merchants when they are solicited. The court indicated it hoped this would “prevent” further issues instead of having to address these matters case-by-case. In addition, the court ordered that the third-party claims companies send an opt-out letter to qualified merchants they had already signed up.

The court allowed attorneys representing the third-party claims filling companies to provide input on the wording of the disclosure. Specially, the court ordered the parties to draft a disclosure to place on solicitations by claims-filing services. The disclosure is to contain a statement that says claims forms are not yet available, a statement making clear the class members need not sign up for a third-party service to participate in monetary relief and explaining that no-cost assistance will be available from the class administrator and class counsel during the claims-filing period, and directions to a court-approved website for additional information.

Counsel for the class has submitted their proposed disclosure to the court for approval. One would assume that the final disclosure will also form the basis for the letter that will be sent to merchants that have signed up for the service, but that remains to be seen.

The impact of on third-party claims filing companies is problematic. It may result in the companies having to submit to the court their solicitation material before being allowed to file claims on behalf of merchants. The court has made clear that it “intends to permanently enjoin any entities that have made false or misleading communications to class members from involvement of any kind in claims-processing services with respect to this case.” One can assume the court would also pursue any companies that make such false or misleading communications in the future.

It appears there is increasing scrutiny of the bankcard industry and especially industry marketing activities. We have not seen much, if any, regulation in this business for a long time but that appears to be changing. And the ramifications for companies engaging in misleading or false advertising could be severe, including, in the more egregious cases, literally being put out of business.

Paul  Rianda has specialized in providing legal advice to the bankcard industry for more than 15 years.