Heartland Files Lawsuit Against Mercury

Published in CSP Daily News

Alleges false advertising, unfair competition, intentional interference with contracts, more

PRINCETON, N.J. -- Heartland Payment Systems Inc. has filed a federal lawsuit against Mercury Payment Systems, charging it with false advertising, unfair competition, intentional interference with contractual relations and intentional interference with prospective economic advantage. The suit, filed in U.S. District Court in the Northern District of California, San Francisco Division, alleges that Mercury is illegally competing against Heartland with deceptive trade practices.

Heartland contends that Mercury is effectively misleading merchant customers by deceptively hiding its excess profits in the interchange fees charged by credit-card networks and their issuing banks, in violation of the Lanham Act and related laws of the State of California.

The suit seeks to stop Mercury's routine deceptive pricing practices to secure new retail customers and maintain their existing merchants. The suit also seeks to recover full value for each merchant and prospect Mercury has wrongfully taken from Heartland by deceptively falsifying pass-through interchange costs and other illegal methods.

"Heartland has consistently advocated for fair, transparent and ethical credit, debit and prepaid card processing and billing procedures for small and mid-size businesses," said Robert O. Carr, chairman and CEO of Heartland. "The deceptive pricing practice of falsely inflating pass-through interchange fees not only constitutes unfair and illegal competition, it also costs even the smallest of merchants hundreds, or sometimes even thousands of their hard-earned dollars each year without their awareness. Industrywide, the cost of deceptive interchange practices runs into tens of millions of dollars, and has caused great harm to the reputation of the entire electronic payments industry."

Carr added, "Aside from putting a stop to Mercury's deceptive, illegal practices, our ultimate objective with this lawsuit is to help ensure a level competitive playing field in the electronic payment processing industry to provide fair, honest services to merchants, regardless of their size or financial sophistication. We believe that when all the facts concerning Mercury's misleading, unlawful practices come to light in open court, we will start to put an end to falsely inflated interchange billing and other deceptive practices that harm our customers as well as the payment processing industry."

Mercury Payment Systems, Durango, Colo., provided the following statement to CSP Daily News regarding the Heartland lawsuit: "Mercury will vigorously defend against the lawsuit filed by Heartland. Mercury Payment Systems' rapid growth in the electronic payments market is directly attributable to the value and flexibility we provide our merchants and partners, and we stand by our business and pricing practices. We are proud of our consistently high satisfaction rates and low merchant attrition rates among merchant acquirers over the past 10 years."

Click here for more details about Heartland's case.

And for more information about the issue of deceptive, illegal practices in the electronic payments industry, click here.

Heartland Payment Systems, the fifth largest payments processor in the United States, delivers credit/debit/prepaid card processing, mobile commerce, e-commerce, marketing solutions, security technology, payroll solutions and related business solutions and services to more than 275,000 business and educational locations nationwide.