CardConnect Corp. Swiped with Lawsuit Over Murky Merchant Contracts

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CardConnect Corp. has been hit with a class action stemming the company’s allegedly improper credit and debit card payment processing practices. The complaint alleges the defendant “induces” merchants into a business relationship by promising low, agreed-upon rates and fees for processing customer payments. What merchants do not realize upon entering an agreement with the defendant, however, is that the fine-print language that governs the contractual relationship is outlined in a separate document. “In this way merchants see and execute one document that prominently displays the agreed-upon rates and fees,” the suit alleges, “but are purportedly also bound by another document (the ‘Program Guide’).”

Plaintiffs argue that through this Program Guide, the defendant aims to backtrack from the previously agreed-upon terms and rates to “immunize” itself from liability should the merchant become wise to CardConnect’s unspoken overcharges.

Moreover, the suit continues, the aforementioned state of affairs set by the defendant creates a “contractual limbo” wherein CardConnect could then ignore agree-upon rates and charges. Due to its unconscionable contract structure, the plaintiffs claim, merchants never actually “accept” contracts by signing them, even though they are held to the unfavorable terms detailed in fine print.

After all is purportedly agreed on, the lawsuit claims, the defendant then raises merchants’ rates and imposes new, unforeseen processing fees.