This Wednesday, Heartland Payment Systems, Inc. sued Mercury Payment Systems, LLC, in federal court. The complaint alleges that Mercury won and maintained customers through "deceptive and unfair practices", among other things. Those practices include "substantially inflating [payment network] fees without disclosing these additional markups to merchants."
In addition to the suit, Heartland is promoting its case via a dedicated website: http://www.merchantservicesdefense.com/. The website says that it hopes the suit and the website "convince Mercury and other processing companies that may be conducting similar schemes that deceitful and illegal practices cannot continue."
Heartland has, through its Merchant Bill or Rights, its suit, and its website, declared a bit of a war on the types of practices it alleges. Whether their skirmish escalates across the industry will depend not only the legal outcome of the case, but also the willingness of others in the industry to follow.
Here are the three questions everyone in the processing world should be asking themselves this morning:
1. Does my company charge what we advertise we charge?
2. Do the prices we charge our customers reflect what is listed in the customer's contract or other terms of service provided to the customers?
3. Are my company's sales team, legal team, and management team all on the same page about what we charge (and can charge) our customers?
It easy to imagine a scenario where the answer is "no," despite a company's best intentions. Regardless, any company that answers no to any of those questions could find themselves in a position similar to Mercury's. On the other hand, any company that answers "yes" may have a quiver in their competitive arrow that may soon be more acceptable or common to use.
For further information visit Waller's Banking Law Blog
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