Three companies have filed a proposed class action lawsuit in Georgia in which they allege defendant WorldPay US, Inc. operates a “multi-part scheme” by which merchants are fraudulently induced into using the company’s card payment processing systems. The scheme, the 73-page lawsuit claims, utilizes “uniform misrepresentations and omissions” concerning the nature and amount of fees companies like the plaintiffs will fork over to WorldPay, with the defendant’s customers supposedly blindsided with “numerous unanticipated and excessive fees” once they’re locked into long-term contracts. According to the plaintiffs, Worldpay “deliberately obscures” many of its out-of-nowhere upcharges in intricately worded statements that leave merchants unable to reasonably detect they’ve been overbilled.
Merchants such as the plaintiffs rely on companies like WorldPay to not only provide crucial payment processing services—which are likely to be a business’s third-highest expense after labor and production—but to be transparent when it comes to its terms and conditions, the suit says. In relationships between merchants and payment processors, the lawsuit continues, the former relies on the later to disclose from the get-go the nature and amount of fees for processing credit and debit card payments, in part because the agreements between the parties tend to be long term and cancellable for steep early termination fees. According to the case, WorldPay’s modus operandi has “long been to exploit its position of knowledge and power” in a manner aimed to defraud merchants:
“[The defendant] aggressively perpetrates this scheme. Its standardized contracts intentionally misrepresent, omit, and/or conceal key facts concerning the fees and rates it knows it will eventually charge merchants if they sign on the dotted line.
[The defendant] engages in this fraud to induce merchants to do business with [the defendant.] Indeed, [the defendant] knows full well that if merchants knew the true nature and extent of the fees they would eventually be charged, they would not agree to do business with [the defendant.]”
The lawsuit is directly related to a similar action—Alghadeer Bakery & Market, Inc. v. WorldPay US, Inc.—concerning similar allegations of overbilling. According to the complaint, the plaintiffs’ counsel has been “contacted by dozens of WorldPay customers” supposedly aggrieved by the defendant’s conduct.