New York, New York (PressExposure) January 20, 2012 -- A private antitrust lawsuit has five million retailers accusing the 13 big banks and two credit card companies of allegedly colluding to charge unreasonably high fees for credit card transactions. Michael Lombardi, lead contributor to popular financial web site Profit Confidential, says that this lawsuit could cost the big banks billions of dollars.
"15 major financial institutions in total...could see corporate earnings plummet if this antitrust suit gains traction," says Lombardi. The case is against Visa Inc., MasterCard Incorporated, and 13 of the big banks, including Citigroup, Inc., JPMorgan Chase & Co.
The retailers are demanding compensation for allegedly overpaying for these fees, dating back to 2004, and are also seeking a permanent fee reduction going forward, reports Profit Confidential.
Estimates for 2009 are that the industry generated approximately $40.0 billion. "Over a period of eight years, the firms earned a few hundred billion," says Lombardi, "Even a small settlement with this lawsuit can potentially translate into billions of dollars of losses..."
According to Lombardi, Citigroup has already pegged its portion of the possible costs of the lawsuit to its corporate earnings at $254 million. A ruling is expected in early 2012 to determine if the case can move forward as a class-action lawsuit.
Lombardi cites this is as yet another risk to owning big banks, in addition to their exposure in the European markets and derivatives on their balance sheets. "Despite the fact that many of the big banks are already down in price, this lawsuit provides yet another reason why the big banks should be avoided in 2012," states Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it "begged" its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation's free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi's current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six