Restaurants Sue Heartland Payment Systems Over Flood of New Fees During Pandemic

A Fortune 100 payment processing company raked in millions of dollars in new fees charged to restaurants and bars during the pandemic, some of which weren’t even open at the time, a new class action lawsuit alleges.

Plaintiffs Black Ship, 33 Taps, and Hinoki the Bird — all restaurants or bars — filed the class action lawsuit against Heartland Payment Systems last Tuesday in a New Jersey federal court.

The businesses claim the payment card processor “dramatically increased” their monthly fees without consent or warning, and at their expense.

The trio say Heartland markets its credit and debit card processing services to small and medium-sized businesses by allegedly claiming its fees are fair and its billing practices are transparent.

“Heartland assures merchants it does not engage in a common industry practice: charging merchants hidden and confusing ‘junk’ fees,” they say.

“However, Heartland abandoned any semblance of honest or transparent billing practices by charging merchants extra fees and burying those charges within a labyrinthine of other charges in monthly statements.”

They say, by imposing new fees without required notice, Heartland “flagrantly disregarded” the promises and agreements it made to them and other merchants. They are suing for breach of contract, breach of good faith and fair dealing, violations of the New Jersey Consumer Fraud Act, and unjust enrichment.

The plaintiffs say, in July 2019, Heartland began charging a monthly $125 “PCI Non-Compliance Fee” that was not authorized by any former agreement.

Heartland assessed a PCI Fee on Black Ship for approximately $1,500, and a PCI fee on 33 Taps in December last year, even though the bar was closed at this time due to the pandemic and processed no transactions, they allege.

Heartland also allegedly started charging merchants a $69 “Reporting Fee” that was not authorized, a monthly $8.50 “Service & Regulatory Mandate” fee, a monthly $54.95 “Customer Intelligence Suite” fee, and two other transaction-based fees.

“Heartland charged these fees to its merchants, often amounting to hundreds or thousands of dollars of extra fees for each merchant each month,” the plaintiffs say.

“Each of these fees was unauthorized, violated Plaintiffs’ Agreement, and was imposed by Heartland without proper notice and without providing an Amended Schedule of Fees or an amended Merchant Processing Agreement.”

The class action lawsuit says, by charging its merchants these fees, Heartland increased its revenues by “tens or hundreds of millions of dollars,” violated its contracts with its merchants, and reneged on its representations to those merchants.

They’re looking to represent all Heartland customers who processed credit card or debit card transactions through Heartland at any time after 2018 and who were charged by Heartland a PCI Non-Compliance Fee, a Reporting Fee, a Service and Regulatory Mandate Fee, a Customer Intelligence Suite Fee, a Non-EMV Assessment Fee, and/or a Non-EMV Program Fee.

They’re seeking certification of the class, damages, an injunction, interest, fees, costs and a jury trial.

In 2010, Heartland paid a $4 million settlement to settle a class action lawsuit that alleged the payment-processing company was negligent and failed to adequately protect consumers’ personal financial information in a large criminal data breach.

Do you use Heartland Payment Systems? Let us know your experience in the comments!

The plaintiffs are represented by Olimpio Lee Squitieri of SQUITIERI & FEARON, LLP

The Heartland Payment Systems Class Action Lawsuit is Black Ship, et al., v. Heartland Payment Systems, Inc., Case No. 3:21-cv-13855, in the United States District Court District of New Jersey.

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