The Supreme Court tussled over a lawsuit appeal filed by a convenience store against the swipe fees that banks collect from businesses accepting debit card payments. The owner of Corner Post, a store in Watford City, North Dakota filed the appeal after his legal complaint was thrown out by the lower courts.
The denial of the case was made on the grounds that the complaint was already way past the state’s 6-year statute of limitations applicable to such litigations.
Lawyers of Center Post had argued that the store started operations only in 2018, which was already past the 6-year period prescribed as limitation. The Center Post attorneys contended that a for the filing of complaints against the 2011 federally approved swipe fee rule.
Technically the circumstance denoted that the premise of the legal complaint brought to court in 2021 pertains to an issue that arose only after the lapse of the 6-year statute of limitations. The store’s lawyers contended that businesses established after the expiration of the prescribed period should not be forever bound by the related limitation statute.
They also argued that the commencement of the time limitation should start only after an adverse action caused a legal injury.
What are Swipe Fees and Why a Statute of Limitation was Prescribed?
In 2011, the US Federal Reserve issued a regulatory ruling that allowed banks to collect Swipe Fees (a.k.a. Interchange Fees) from businesses whenever store customers use their debit cards to pay for purchases.
However, the federal ruling included statutes of limitations within which banks or debt collection agencies can file lawsuits against older delinquent customers or creditors. Moreover, the statute prevents collectors from overcharging by continuously increasing the amount of fees or charges collected from consumers.
On the other hand, the statute also prescribes limitations within which customers can file legal complaints against collectors who violate the Fair Debt Collection Practices Act. The statute technically prevents consumers from filing or threatening to file legal complaints against creditors or banks that collect time-barred charges or fees
