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January 21, 2014 / Corina Valderrama

Lawsuit against Credit Card Equipment Fees Granted Class Certification

A California federal judge has certified a class action lawsuit that claims credit card equipment companies charged merchants excessive fees and hidden costs. According to the lawsuit, several major companies that provide electronic payment services participated in a scheme to charge merchants excessive fees and other hidden costs to lease credit and debit card processing equipment.

Specifically, plaintiffs claim that the companies convince merchants “through a series of deceitful misrepresentations and forged documents to enroll in fraudulent equipment leases.” Plaintiffs argue that the high cost of the equipment leases surpasses the cost of the equipment and, instead, the money is being used to pay commissions.

These companies used deceitful tactics to present their contracts as legitimate, claims the lawsuit. For example, plaintiffs claim that they were presented with only one page of a contract that apparently included multiple pages. Likewise, these companies presented contracts with signatures on the first page instead of the last page.

The plaintiffs allege claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), California’s Unfair Competition Law, California business law, and negligent misrepresentation. They sought certification of a class of merchants who entered into contracts or leases for card services with any of the defendants since March 26, 2006, plus five subclasses.

On December 20, California District Judge Claudia Wilken granted the plaintiffs’ motion for class certification in part, certifying two subclasses.

If you feel that you have been the victim of deceitful business practices, please contact Khorrami Sumner Sanguinetti, LLP for a private consultation.


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