WorldPay Seeks Dismissal of Processing Fee Class Action Lawsuit

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WorldPay US Inc. has asked a judge to dismiss a class action lawsuit accusing it of breaching contracts by unilaterally increasing payment processing fees, arguing the contract allows it to make the changes.

Plaintiffs Hameed Alburkat and Alghadeer Bakery & Market Inc. filed the breach of contract class action lawsuit against WorldPay in August 2016.

The lawsuit argues that the payment processing company takes advantage of “mom and pop” businesses by getting them to agree to long-term deals for services that are either non-cancellable or which can only be cancelled after paying a hefty penalty for early termination.

Alburkat, the owner of Alghadeer Bakery & Market, claims that WorldPay encouraged him to switch payment providers, claiming that WorldPay could allow him to save a substantial amount in merchant service costs. In December 2013, Alburkat says he entered into a contract with WorldPay.

According to the WorldPay class action lawsuit, after Alburkat began doing business with WorldPay, “it became clear that the agreed upon pricing was not being followed.”

Alburkat states that WorldPlay inflated its own per transaction fees and recurring fees above the rates that were specified in the contract.

Further, Alburkat alleges in the processing fee class action lawsuit that in 2015 WorldPay charged an annual fee of $159 even though there was no annual fee provided for in the contract.

“Upon discovering these and other improper charges, Plaintiffs demanded that all payment processing services be terminated,” the WorldPay class action lawsuit states. “Plaintiffs were informed, in writing, that in order to terminate the contract, they would be required to pay an early termination fee of $495 and pay an additional $260 to cover WorldPay’s expected income loss through the end of the contract term.”

According to the WorldPay class action lawsuit, the contract stated that there would be a $95 early termination fee and did not mention that there would be any additional fees for reimbursement of expected loss in income due to the early termination.

WorldPay disputes the plaintiffs’ allegations and argues that, under the terms of the contract, they should have brought their concerns directly to WorldPay instead of filing the class action lawsuit.

Further, the company claims the plaintiffs cannot seek damages because they have not paid all of the fees that are at issue in the payment processing fee class action lawsuit.

“WorldPay is once again unaware of any precedent holding that a plaintiff can recover for breach of contract merely because the defendant asked for something the plaintiff declined to give,” WorldPay argues in its motion to dismiss the class action lawsuit. “Even assuming that a request for such a fee could be considered a ‘breach’ (which itself seems like a doubtful proposition), an unfulfilled demand gives rise to no damages – an essential ingredient of any claim for breach of contract.”

WorldPay maintains that its contract allows it to adjust its fees in response to changes in market conditions. “When those assumptions and conditions change, processors need the flexibility to adjust fees in order to ensure a sustainable relationship with the merchants they serve,” WorldPay argues.

The plaintiffs are represented by E. Adam Webb, Matthew C. Klase and G. Franklin Lemond Jr. of Webb Klase & Lemond LLC.

The WorldPay Payment Processing Fee Class Action Lawsuit is Alburkat, et al. v. WorldPay US Inc., Case No. 1:16-cv-03627, in the U.S. District Court for the Northern District of Georgia.