Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 1 of 31
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`
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`Sophia Rios, SBN 305801
`BERGER MONTAGUE PC
`401 B Street, Suite 2000
`San Diego, CA 92101
`Tel. 619.489.0300
`Fax 215.875.4604
`srios@bm.net
`
`Attorney for Plaintiffs
`[Additional counsel listed on signature page]
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`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`KRISHNENDU CHAKRABORTY, JESUS
`GUERRERO, MAUREEN YOUNG,
`RACHELLE BLAKE, SHERIDINE
`HARRIS, RHONDA MCDONALD,
`EMILY WRIGHT, BRYAN DAHL,
`KAREN NEEDHAM, and RACHEL
`MULLINS, on behalf of themselves and all
`others similarly situated,
`
`Plaintiffs,
`
`v.
`
`VISA INC., VISA U.S.A. INC., AND VISA
`INTERNATIONAL SERVICE
`ASSOCIATION;
`
`Defendants
`
`
`
`Case No. 3:21-cv-5302
`
`CLASS ACTION COMPLAINT
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`(I) Unjust Enrichment;
`(II) Violation of California Unfair
`Competition Law, Cal. Bus. & Prof.
`Code §§ 17200, et seq.;
`(III) Washington Consumer Protection
`Act, RCW § 19.86, et seq.;
`(IV) Violations of the Illinois
`Consumer Fraud Act
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`JURY TRIAL DEMANDED
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 2 of 31
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`TABLE OF CONTENTS
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`INTRODUCTION ............................................................................................................... 3
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`THE PARTIES ..................................................................................................................... 8
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`A.
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`B.
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`Defendants .................................................................................................... 8
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`Plaintiffs ........................................................................................................ 8
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`FACTUAL ALLEGATIONS ............................................................................................ 14
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`A.
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`B.
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`C.
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`Overview of the Payment Card Foreign Exchange Market ........................ 14
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`Applicable Contractual Provisions .............................................................. 16
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`1. Member Bank Customer Agreements ........................................................ 16
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`2. Visa Rules .................................................................................................. 17
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`Visa Imposed Inflated Foreign Exchange Rates in Violation of the Visa
`Rules ............................................................................................................ 20
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`CLASS ACTION ALLEGATIONS .................................................................................. 21
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`CLAIMS FOR RELIEF ..................................................................................................... 24
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`PRAYER FOR RELIEF ..................................................................................................... 30
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`DEMAND FOR JURY TRIAL .......................................................................................... 31
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 3 of 31
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`Plaintiffs Krishnendu Chakraborty, Jesus Guerrero, Maureen Young, Rachelle
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`Blake, Sheridine Harris, Rhonda McDonald, Emily Wright, Bryan Dahl, Karen Needham,
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`and Rachel Mullins (“Plaintiffs”), allege the following claims for relief against Defendants
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`Visa Inc., Visa U.S.A. Inc., and Visa International Service Association (collectively “Visa”
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`or “Defendants”).
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`INTRODUCTION
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`1.
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`Defendants Visa Inc., Visa U.S.A. Inc., and Visa International Service
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`Association are together a U.S.-based multinational financial services corporation that
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`processes electronic funds transfers throughout the world through its electronic payments
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`network (known as “VisaNet”), most commonly through Visa-branded credit cards, debit
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`cards, and prepaid cards (collectively, “payment cards”).
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`2.
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`Plaintiffs and members of the proposed Classes1 are Visa payment card
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`cardholders in the U.S. who were issued Visa-branded payment cards, and used those cards
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`to transact in foreign currencies.
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`3.
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`Visa does not issue payment cards directly to consumers. Instead, it provides
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`financial institutions with Visa-branded payment products that the financial institutions then
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`use to offer payment cards to their customers.
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`4.
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`Visa requires the banks that issue Visa-branded payment cards (the “member
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`banks” or “issuing banks”) to agree to be bound by certain rules of Visa (the “Visa Rules,”
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`available
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`at https://usa.visa.com/content/dam/VCOM/download/about-visa/visa-rules-
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`public.pdf). These Rules provide, inter alia, that the foreign exchange (“FX”) rates applied
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`to consumer payment card transactions in foreign currencies for each day will either be
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`wholesale FX market rates or a government-mandated rate. The vast majority of
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`jurisdictions do not have government-mandated rates.
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`1 The Nationwide Class and proposed alternative State Classes are referred to herein as the
`“Classes.”
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 4 of 31
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`5.
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`The Visa Rules also provide that the member banks must provide specific
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`disclosures to member bank payment card cardholders describing what FX rates will be
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`imposed.
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`6. Member banks require all of their cardholders, including Plaintiffs and
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`members of the proposed Classes, to agree to the terms of standardized credit card
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`agreements and debit card agreements (together, the “Cardholder Agreements”) as a
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`condition of being issued Visa-branded payment cards.
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`7.
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`The member banks include language referencing the Visa Rules in their
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`Cardholder Agreements, promising their cardholders, including Plaintiffs and Class
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`Members, that the FX rates applied to foreign transactions will be either wholesale market
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`rates or, in jurisdictions that have them, government-mandated rates.2
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`8.
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`Contrary to the Visa Rules and Cardholder Agreements, the FX rates applied
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`to cardholder transactions do not represent rates available in the wholesale FX market.
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`9.
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`Further, even when the FX rates imposed by Visa are within the trading
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`ranges of the individual currencies within the wholesale market for the applicable dates, the
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`methods by which the rates are imposed are unfair, in bad faith, and therefore in violation
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`of the Visa Rules and the Cardholder Agreements.
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`10. Based on the language of the Visa Rules regarding exchange rates—and the
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`identical language set forth in the Cardholder Agreements—cardholders reasonably expect
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`(and are led to believe) that the banks will charge wholesale rates that bear some
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`resemblance to the rates that Visa and the banks themselves receive when transacting in
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`foreign currencies to facilitate the cardholders’ transactions. In fact, however, the banks and
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`2 Some countries use fixed exchange rate systems, sometimes called a pegged exchange
`rate, in which their respective currency’s value is fixed or pegged by a monetary authority
`against the value of another currency, such as the U.S. Dollar. For example, the Bermudian
`dollar is pegged to the U.S. Dollar at a one-to-one ratio by the Bermuda Monetary Authority.
`Visa does not apply government-mandated exchange rates for foreign payment card
`transactions in the limited set of countries that have adopted fixed exchange rate systems;
`instead, it adjusts the rates to provide a profit for Visa. For all other currencies, the Visa
`Rules and the Cardholder Agreements provide that wholesale FX market rates must be
`applied.
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`Visa rarely engage in wholesale market transactions to facilitate the cardholders’
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`transactions, but when they do, they will charge and/or be charged genuine wholesale rates.
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`Visa settles much of the transactions by U.S. cardholders with foreign merchants in U.S.
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`Dollars, meaning neither the banks nor Visa engage in any currency conversion at all. In
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`these instances, the need for any currency conversion at all is a pure fiction, and any hidden
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`charge for the same, and/or the manipulation of FX rates in breach of the Visa Rules and
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`the Cardholder Agreements, is unlawful and unjustly enriches Visa to the detriment of Visa
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`cardholders. While the price the U.S. cardholder was quoted was in a foreign currency at
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`the point of sale, the cardholder’s account was in fact debited in U.S. Dollars, and the
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`foreign merchant was typically paid in the foreign merchant’s domestic currency.
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`11. Even in transactions that Visa actually settles in foreign currencies, the need
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`for currency exchange is minimal. Visa is engaged in multilateral global transactions on a
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`massive scale (i.e., doing multiple transactions in both directions—e.g., U.S. Dollars to
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`Euros, and Euros to U.S. Dollars). As a result of all these transactions, Visa is constantly in
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`possession of large amounts of various currencies. Given its own currency balances, Visa
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`only needs to engage in foreign currency transactions to settle any net currency settlement
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`requirements.
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`12.
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`In sum, the FX rates Visa imposes and that banks charge cardholders for
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`foreign transactions are largely a fiction and represent a non-transparent charge. They bear
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`no resemblance to any exchange rate obtained or which could be obtained by the banks or
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`Visa in wholesale markets, as many times Visa exchanged no currency whatsoever (because
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`the transaction was settled in U.S. Dollars or because Visa had foreign currency on hand to
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`settle the transaction with the foreign merchant) or traded at spot or forward FX prices.
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`13.
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`Instead of approximating the issuing banks and Visa’s actual costs of
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`acquiring foreign currency to settle transactions, the rates Visa imposes and member banks
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`charge consumers for FX transactions are designed to maximize profits for the banks and
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`Visa. Specifically, the rates imposed vary based on the direction of the transaction, and are
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`always in the banks’ and Visa’s favor. For example, for any given processing date, the rate
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 6 of 31
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`imposed for converting U.S. Dollars to Euros will be significantly different from the inverse
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`rate for converting Euros to U.S. Dollars. In both instances, it will be outside—or at the
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`very high end of—the daily ranges of wholesale market rates for each currency conversion.
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`This means that the cardholder will always get the worst rate and Visa will always get the
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`best rate.
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`14. Wholesale FX market participants make offers to purchase foreign
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`currencies (referred to as a “bid” price), sell FX (the “ask price”), and the difference between
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`the bid and the ask is called the “bid-ask spread.” Because the trading volume is so large,
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`bid-ask spreads in the wholesale FX market are generally exceedingly small.
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`15. Because the rates imposed by Visa need not be contemporaneous (i.e., from
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`a bid-ask at a given point in time on the wholesale market), the spread between the two rates
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`imposed by Visa for each currency pair (e.g., the spread between the rates for Euros to U.S.
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`Dollars and for U.S. Dollars to Euros) exceeds the normal bid-ask spread by considerable
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`margins, much greater than those at any given point in time on the markets themselves. In
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`other words, Visa and banks are creating a fictional bid-ask spread (the highest rate in the
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`day versus the lowest rate in the day), and then manipulating the rate applied to Class
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`Member transactions so that the members of the proposed Classes either always get the
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`worst possible rate in either direction, or in fact are applied rates that are even outside of
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`this fictional bid-ask spread, making it even worse for these consumers. This practice
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`renders the promise of a rate from the wholesale markets illusory, as Visa is acting in a way
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`no party to the contract would have reasonably expected—not to impose a bid-ask from the
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`markets at any given point in time, but to impose a bid from one point in time, and an ask
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`from an entirely different point in time—and then applying the worst possible rate for the
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`cardholder in every case in both directions.
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`16. This means that the FX rates imposed are excessively costly for cardholders
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`and unreasonably profitable for the banks and Visa.
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`17. Visa makes money on the difference between the rate it imposes on
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`consumers to engage in the foreign transaction, and the rate (if any) Visa actually pays to
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`acquire the foreign currency used to settle the transaction. When transactions are settled in
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`the consumer’s home currency (where no foreign currency is used at all), Visa’s hidden
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`manipulation of the FX rates charged to cardholders enables Visa to profit at the expense
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`of cardholders. Because Visa also receives a percentage of the value of each transaction as
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`a processing fee, it also benefits directly from inflated transaction amounts.
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`18. Members of the proposed Classes transacted millions of dollars in foreign
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`currencies with their Visa-branded payment cards during the relevant time period. Visa’s
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`illegal conduct has caused Plaintiffs and the Class Members to pay more for foreign
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`transactions than they would have paid if Visa had complied in good faith with its
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`contractual obligations to charge wholesale FX market rates rather than contrived rates.
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`Class Members paid more because the FX rates were less favorable than those promised in
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`the relevant contracts (thereby diminishing Class Members’ purchasing power) and also
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`because Visa’s conduct inflated the amount involved in each transaction, thereby causing
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`Class Members to pay higher foreign transaction fees, which are usually charged as a
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`percentage of the total transaction amount, and to pay more in credit card interest than they
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`would have had to pay had the transaction value had not been improperly inflated.
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`JURISDICTION, VENUE, AND INTERSTATE COMMERCE
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`19. This Court has subject matter jurisdiction under 28 U.S.C. § 1332(d), in that
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`this is a class action in which the aggregate amount in controversy exceeds the sum of
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`$5,000,000, exclusive of interest and costs, and in which some members of the proposed
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`Classes are citizens of a state different from Visa.
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`20. The Court has personal jurisdiction over Visa because Visa’s acts giving rise
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`to Plaintiffs’ claims took place, in substantial part, in California generally and this District
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`specifically. Visa has continuously and systematically transacted FX in this District and
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`throughout the United States. Visa is headquartered in, maintains its principal place of
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`business in, and maintains offices in San Francisco.
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`21. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b). Visa resides,
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`transact business, is found, and has agents in this District. Additionally, a substantial part
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`of the events giving rise to Plaintiffs’ claims occurred in this District, and a substantial
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`portion of the affected interstate trade and commerce described herein has been carried out
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`in this District.
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`INTRADISTRICT ASSIGNMENT
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`22.
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`Pursuant to L.R. 3-5(a), venue is proper in the San Francisco or Oakland
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`Division.
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`A.
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`Defendants
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`THE PARTIES
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`23. Defendants Visa, Inc., Visa International Service Association, and Visa
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`U.S.A., Inc. are Delaware corporations with their principal place of business in San
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`Francisco, California. Defendants Visa, Inc., Visa International Service Association, and
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`Visa U.S.A., Inc. are collectively referred to herein as “Visa.”
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`B.
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`Plaintiffs
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`24.
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`Plaintiff Krishnendu Chakraborty is an individual and a resident of
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`Burlington, Massachusetts. During the relevant time period, Mr. Chakraborty engaged in
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`payment card transactions in Euros (“EUR”) with his TD Bank issued Visa-branded debit
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`card. During the relevant time period, Mr. Chakraborty also engaged in payment card
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`transactions in Euros (“EUR”), Indian Rupee (“INR”), and Swiss Francs (“CHF”) with his
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`Capital One issued Visa-branded credit card. In violation of the Visa Rules and TD Bank’s
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`and Capital One’s agreements with Mr. Chakraborty, Visa imposed rates for Mr.
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`Chakraborty’s transactions that were outside the range of bid-ask spreads on wholesale
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`market rates (for some transactions) and at the very high end of wholesale rates (for other
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`transactions) for U.S. Dollar to Euro (“EUR/USD”), U.S. Dollar to Indian Rupee
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`(“USD/INR”), and U.S. Dollar to Swiss Francs (“CHF/USD”) exchange rates. Visa
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`imposed these rates not in good faith, but in an effort to maximize Visa’s profits at Mr.
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`Chakraborty’s expense, in violation of the Visa Rules and Mr. Chakraborty’s reasonable
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`expectations that Visa would act in good faith in imposing exchange rates. The FX rates
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`that Visa imposed on Mr. Chakraborty’s transactions were more costly to Mr. Chakraborty
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`than they would have been if the rates had been imposed reasonably from within the
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`wholesale market rate range pursuant to the Visa Rules and the Cardholder Agreements
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`between Mr. Chakraborty and TD Bank and between Mr. Chakraborty and Capital One.
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`25.
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`Plaintiff Jesus Guerrero is an individual and a resident of Los Angeles
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`County, California. During the relevant time period, Mr. Guerrero engaged in payment card
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`transactions in Mexican Pesos (“MXN”) with his Bank of America issued Visa-branded
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`debit card. In violation of the Visa Rules and Bank of America’s agreements with Mr.
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`Guerrero, Visa imposed rates for Mr. Guerrero’s transactions that were outside the range of
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`bid-ask spreads on wholesale market rates (for some transactions) and at the very high end
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`of wholesale rates (for other transactions) for U.S. Dollar to Mexican Peso (“USD/MXN”)
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`exchange rates. Visa imposed these rates not in good faith, but in an effort to maximize
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`Visa’s profits at Mr. Guerrero’s expense, in violation of violation of the Visa Rules and Mr.
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`Guerrero’s reasonable expectations that Visa would act in good faith in imposing exchange
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`rates. The FX rates that Visa imposed on Mr. Guerrero were more costly to Mr. Guerrero
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`than they would have been if the rates had been imposed reasonably from within the
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`wholesale market rate range pursuant to the Visa Rules and the Cardholder Agreements
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`between Mr. Guerrero and Bank of America.
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`26.
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`Plaintiff Maureen Young is an individual and a resident of Maineville, Ohio.
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`During the relevant time period, Ms. Young engaged in payment card transactions in
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`Canadian dollars (“CAD”) and British Pounds (“GBP”) with her Bank of America issued
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`Visa-branded credit card. During the relevant time period, Ms. Young also engaged in
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`payment card transactions in Euros (“EUR”), British Pounds (“GPB”), and Canadian dollars
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`(“CAD”) with her Chase issued Visa-branded credit card. In violation of the Visa Rules and
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`Bank of America’s and Chase’s agreements with Ms. Young, Visa imposed rates for Ms.
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`Young’s transactions that were outside the range of bid-ask spreads on wholesale market
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`rates (for some transactions) and at the very high end of wholesale rates (for other
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`transactions) for U.S. Dollar to Canadian dollar (“USD/CAD”) and U.S. Dollar to British
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`Pound (“GBP/USD”) exchange rates. Visa imposed these rates not in good faith, but in an
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 10 of 31
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`effort to maximize Visa’s profits at Ms. Young’s expense, in violation of the Visa Rules
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`and Ms. Young’s reasonable expectations that Visa would act in good faith in imposing
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`exchange rates. The FX rates that Visa imposed on Ms. Young were more costly to Ms.
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`Young than they would have been if the rates had been imposed reasonably from within the
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`wholesale market rate range pursuant to the Visa Rules and the Cardholder Agreements
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`between Ms. Young and Bank of America and between Ms. Young and Chase.
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`27.
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`Plaintiff Rachelle Blake is an individual and a resident of Orange County,
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`California. During the relevant time period, Ms. Blake engaged in payment card
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`transactions in Euros (“EUR”), British Pounds (“GPB”), and New Zealand dollars (“NZD”)
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`with her Bank of America issued Visa-branded debit card. In violation of the Visa Rules
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`and Bank of America’s agreements with Ms. Blake, Visa imposed rates for Ms. Blake’s
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`transactions that were outside the range of bid-ask spreads on wholesale market rates (for
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`some transactions) and at the very high end of wholesale rates (for other transactions) for
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`U.S. Dollar to Euro (“EUR/USD”), U.S. Dollar to British Pound (“GBP/USD”), and U.S.
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`Dollar to New Zealand dollar (“NZD/USD”) exchange rates. Visa imposed these rates not
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`in good faith, but in an effort to maximize Visa’s profits at Ms. Blake’s expense, in violation
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`of the Visa Rules and Ms. Blake’s reasonable expectations that Visa would act in good faith
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`in imposing exchange rates. The FX rates that Visa imposed on Ms. Blake were more costly
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`to Ms. Blake than they would have been if the rates had been imposed reasonably from
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`within the wholesale market rate range pursuant to Visa Rules and the Cardholder
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`Agreement between Ms. Blake and Bank of America.
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`28.
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`Plaintiff Sheridine Harris is an individual and a resident of Los Angeles
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`County, California. During the relevant time period, Ms. Harris engaged in payment card
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`transactions in Euros (“EUR”), Canadian dollars (“CAD”), Chinese Yuan (“CNY”),
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`Australian dollars (“AUD”), Japanese Yen (“JPY”), and Trinidad and Tobago dollars
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`(“TTD”) with her Bank of America issued Visa-branded debit card. In violation of the Visa
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`Rules and Bank of America’s agreements with Ms. Harris, Visa imposed rates for Ms.
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`Harris’s transactions that were outside the range of bid-ask spreads on wholesale market
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`-10-
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`COMPLAINT FOR DAMAGES AND JURY TRIAL DEMAND
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 11 of 31
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`rates (for some transactions) and at the very high end of wholesale rates (for other
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`transactions) for U.S. Dollar to Euro (“EUR/USD”), U.S. Dollar to Canadian dollar
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`(“USD/CAD”), U.S. Dollar to Chinese Yuan (“USD/CNY”), U.S. Dollar to Australian
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`dollar (“AUD/USD”), U.S. Dollar to Japanese Yen (“USD/JPY”), and U.S. Dollar to
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`Trinidad and Tobago dollar (“USD/TTD”) exchange rates. Visa imposed these rates not in
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`good faith, but in an effort to maximize Visa’s profits at Ms. Harris’s expense, in violation
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`of the Visa Rules and Ms. Harris’s reasonable expectations that Visa would act in good faith
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`in imposing exchange rates. The FX rates that Visa imposed on Ms. Harris were more costly
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`to Ms. Harris than they would have been if the rates had been imposed reasonably from
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`within the wholesale market rate range pursuant to the Visa Rules and the Cardholder
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`Agreements between Ms. Harris and Bank of America.
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`29.
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`Plaintiff Rhonda McDonald is an individual and a resident of Harris County,
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`Texas. During the relevant period, Ms. McDonald engaged in payment card transactions in
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`Euros (“EUR”), and Canadian dollars (“CAD”), with her Bank of America issued Visa-
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`branded debit card. In violation of the Visa Rules and Bank of America’s agreements with
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`Ms. McDonald, Visa imposed rates for Ms. McDonald’s transactions that were outside the
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`range of bid-ask spreads on wholesale market rates (for some transactions) and at the very
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`high end of wholesale rates (for other transactions) for U.S. Dollar to Euro (“EUR/USD”),
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`and U.S. Dollar to Canadian dollar (“USD/CAD”). Visa imposed these rates not in good
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`faith, but in an effort to maximize Visa’s profits at Ms. McDonald’s expense, in violation
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`of the Visa Rules and Ms. McDonald’s reasonable expectations that Visa would act in good
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`faith in imposing exchange rates. The FX rates that Visa imposed on Ms. McDonald were
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`more costly to Ms. McDonald than they would have been if the rates had been imposed
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`reasonably from within the wholesale market rate range pursuant to the Visa Rules and the
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`Cardholder Agreements between Ms. McDonald and Bank of America.
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`30.
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`Plaintiff Emily Wright is an individual and a resident of Seattle, Washington.
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`During the relevant time period, Ms. Wright engaged in payment card transactions in Euros
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`(“EUR”), Croatian Kuna (“HRK”), and British Pounds (“GBP”) with her Capital One issued
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`-11-
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`COMPLAINT FOR DAMAGES AND JURY TRIAL DEMAND
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 12 of 31
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`Visa-branded credit card. In violation of the Visa Rules and Capital One’s agreements with
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`Ms. Wright, Visa imposed rates for Ms. Wright’s transactions that were outside the range
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`of bid-ask spreads on wholesale market rates (for some transactions) and at the very high
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`end of wholesale rates (for other transactions) for U.S. Dollar to Euro (“EUR/USD”), U.S.
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`Dollar to Croatian Kuna (“USD/HRK”), and U.S. Dollar to British Pound (“GBP/USD”)
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`exchange rates. Visa imposed these rates not in good faith, but in an effort to maximize
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`Visa’s profits at Ms. Wright’s expense, in violation of the Visa Rules and Ms. Wright’s
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`reasonable expectations that Visa would act in good faith in imposing exchange rates. The
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`FX rates that Visa imposed on Ms. Wright’s transactions were more costly to Ms. Wright
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`than they would have been if the rates had been imposed reasonably from within the
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`wholesale market rate range pursuant to the Visa Rules and the Cardholder Agreements
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`between Ms. Wright and Capital One.
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`31.
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`Plaintiff Bryan Dahl is an individual and a resident of Victorville, California.
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`He was formerly a resident of Illinois and lived in Illinois when the relevant transactions
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`were made. During the relevant time period, Mr. Dahl engaged in payment card transactions
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`in Euros (“EUR”) with his Chase issued Visa-branded credit card. In violation of the Visa
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`Rules and Chase’s agreements with Mr. Dahl, Visa imposed rates for Mr. Dahl’s
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`transactions that were outside the range of bid-ask spreads on wholesale market rates (for
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`some transactions) and at the very high end of wholesale rates (for other transactions) for
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`U.S. Dollar to Euro (“USD/EUR”) exchange rates. Visa imposed these rates not in good
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`faith, but in an effort to maximize Visa’s profits at Mr. Dahl’s expense, in violation of the
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`Visa Rules and Mr. Dahl’s reasonable expectations that Visa would act in good faith in
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`imposing exchange rates. The FX rates that Visa imposed on Mr. Dahl’s transactions were
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`more costly to Mr. Dahl than they would have been if the rates had been imposed reasonably
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`from within the wholesale market rate range pursuant to the Visa Rules and the Cardholder
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`Agreement between Mr. Dahl and Chase.
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`32.
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`Plaintiff Karen Needham is an individual and a resident of Eugene, Oregon.
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`Ms. Needham engaged in payment card transactions in Euros (“EUR”) and British Pounds
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`-12-
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`COMPLAINT FOR DAMAGES AND JURY TRIAL DEMAND
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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 13 of 31
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`(“GPB”) with her Chase issued Visa-branded credit card. In violation of the Visa Rules and
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`Chase’s agreements with Ms. Needham, Visa imposed rates for Ms. Needham’s
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`transactions that were outside the range of bid-ask spreads on wholesale market rates (for
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`some transactions) and at the very high end of wholesale rates (for other transactions) for
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`U.S. Dollar to Euro (“USD/EUR”) exchange rates and U.S. Dollar to British Pounds
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`(“USD/GBP”) exchange rates. Visa imposed these rates not in good faith, but in an effort
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`to maximize Visa’s profits at Ms. Needham’s expense, in violation of the Visa Rules and
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`Ms. Needham’s reasonable expectations that Visa would act in good faith in imposing
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`exchange rates. The FX rates that Visa imposed on Ms. Needham’s transactions were more
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`costly to Ms. Needham than they would have been if the rates had been imposed reasonably
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`from within the wholesale market rate range pursuant to the Visa Rules and the Cardholder
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`Agreement between Ms. Needham and Chase.
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`33.
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`Plaintiff Rachel Mullins is an individual and a resident of Los Angeles,
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`California. Ms. Mullins engaged in payment card transactions in Euros (“EUR”), Indian
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`Rupee (“INR”), and United Arab Emirates Dirham (“AED”) with her Chase issued Visa-
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`branded credit card. In violation of the Visa Rules and Chase’s agreements with Ms.
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`Mullins, Visa imposed rates for Ms. Mullins’s transactions that were outside the range of
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`bid-ask spreads on wholesale market rates (for some transactions) and at the very high end
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`of wholesale rates (for other transactions) for U.S. Dollar to Euro (“USD/EUR”) exchange
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`rates, U.S. Dollar to Indian Rupee (“USD/INR”) exchange rates, and U.S. Dollar to United
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`Arab Emirates Dirham exchange rates (“USD/AED”). Visa imposed these rates not in good
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`faith, but in an effort to maximize Visa’s profits at Ms. Mullins’s expense, in violation of
`
`the Visa Rules and Ms. Mullins’s reasonable expectations that Visa would act in good faith
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`in imposing exchange rates. The FX rates that Visa imposed on Ms. Mullins’ transactions
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`were more costly to Ms. Mullins than they would have been if the rates had been imposed
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`reasonably from within the wholesale market rate range pursuant to the Visa Rules and the
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`Cardholder Agreement between Ms. Mullins and Chase.
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`COMPLAINT FOR DAMAGES AND JURY TRIAL DEMAND
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`-13-
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`

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`Case 4:21-cv-05302-YGR Document 1 Filed 07/09/21 Page 14 of 31
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`
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`FACTUAL ALLEGATIONS
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`A.
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`Overview of the Payment Card Foreign Exchange Market
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`34. When a U.S. consumer makes a payment card transaction in U.S. Dollars
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`with a U.S. merchant, the merchant runs the physical card (or card information, for an online
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`or phone order) through its payment card terminal, the card information is submitted to
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`Visa’s electronics payment system, and the system sends information about the transaction
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`to the cardholder’s issuing bank to make sure the cardholder has enough money or credit
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`available to complete the purchase, and to confirm that the card is valid and not lost, stolen,
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`fake or expired. The transaction is then approved or declined. For approved transactions,
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`the merchant’s accoun