Thursday, May 28th, 2020
Last year, customers of WorldPay, one of the world’s leading online payment processors, took the company to court seeking compensation for overcharging customers.
In news that was widely reported, especially in the UK, complainants filed a class-action lawsuit, alleging that the processor exploited the complexity of its card processing services to charge merchants more than the user agreement allows.
The class of the settlement was all US-based customers that pay WorldPay US Inc. who contracted the payment processor and ended up paying fees not listed in the customer processing agreement.
In the suit, the plaintiff alleged that “the defendant assessed unauthorized charges for payment card processing services.”
WorldPay initially denied the allegations. However, the company later changed tack and decided to enter a settlement to protect the company’s name and avoid litigation.
Under the settlement, WorldPay undertakes to pay $15 million into a Settlement Fund. This settlement fund will be distributed to the Independent Sales Organization (ISO) and Small Business Unit (SBU) customers who used WorldPay for payment processing between August 26, 2010, and January 10, 2020. Additionally, Worldpay has committed to amending its payment terms and conditions.
US District Judge Michael L. Brown, who presided over the initial hearing at the US District Court for the Northern District of Georgia, gave preliminary approval to the settlement terms.
“By any objective measure, the court finds this settlement fair, adequate, and reasonable,” said Mr. Brown. “It merits preliminary approval.”
The court has scheduled another hearing on June 3, 2020, in Atlanta, Georgia, to make a final determination on whether to approve the settlement and other related matters.
If the settlement is approved at the June hearing, Settlement Class members who file a valid and timely claim are eligible for cash payments. The amount of money each business can take home will be based on a four-part formula attached to an exhibit in the settlement agreement. Anyone who wishes to file a claim must do so by July 8, 2020.
It’s a Wait and See
No one knows whether the settlement will be approved in the final hearing. However, what’s clear is that the payment processor doesn’t want the matter to drag any further out of fears of an intense backlash in case it blows out of proportion. So, unless Worldpay reviews and changes its position, the settlement should go through.