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tickets, and credit card registration. Petitioner provided most
of these services before it imposed an annual membership fee.
Petitioner provided some services only if the cardholder used the
card to make a specific purchase, e.g., free collision insurance
with the rental of a car. Some of these services increased in
value after petitioner imposed the annual membership fee, e.g.,
the amount of accident insurance. Petitioner provided these
services year-round, although use of them varied seasonally.
Petitioner generally issued new MasterCards to its
cardholders every 2 years. Petitioner reissued cards evenly
throughout the year. Reissuance of a card did not necessarily
coincide with the date petitioner charged the annual membership
fee.
Petitioner established a customer's MasterCard credit limit
when petitioner approved a customer’s application for the
account. Thereafter, petitioner occasionally changed the credit
limit at a cardholder’s request. Petitioner sometimes raised
credit limits to accommodate cardholders and sometimes lowered
credit limits to reduce petitioner’s risk. Credit limit changes
were not related to the charging and payment of the annual
membership fee.
6. Petitioner’s Reporting of the Annual Membership Fees
Petitioner reported the annual membership fees it received
from 1983 to 1985 ratably over a 12-month period for Federal
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Last modified: May 25, 2011