CardConnect Hit with New Class Action Over Alleged Unauthorized Fees

Case Overview: A class action lawsuit has been filed against CardConnect, alleging the payment processor charged unauthorized fees to merchants, including fees not outlined in their contracts.

Consumers Affected: Businesses that have used CardConnect's payment processing services and have been charged unauthorized fees.

Court: U.S. District Court for the Eastern District of Pennsylvania

swiping credit card fees

Medical Office Accuses Payment Processor of Deceptive Billing Practices

A physician assistant office has slapped CardConnect with a class action lawsuit alleging it charged unauthorized fees that were much higher than indicated in an initial contract. 

Richard E. Obringer PAC — doing business as Advanced Surgical Associates (ASA) — filed the class action complaint against CardConnect Corporation on July 11 in a Pennsylvania federal court, alleging the payment processing company violated state and federal business laws by charging unauthorized fees to its customers. 

“CardConnect deceives merchants like Plaintiff into paying much more than agreed upon by sneaking unauthorized junk fees into customers’ billing statements each month,” the lawsuit states.

Rising Costs of Payment Processing Put Pressure On Small Businesses

As credit and debit card transactions have become essential for businesses, especially since the pandemic, the cost of merchant services has risen significantly, making it one of the highest expenses for merchants, ASA says.

Small businesses like ASA rely on fair and transparent service agreements to process payments, the company adds.

It expects that CardConnect, responsible for ensuring accurate payment transactions, will take a small percentage of each transaction and charge the specific fees outlined in its Merchant Agreements. However, according to the complaint, CardConnect has been deceiving merchants by slipping unauthorized fees into their statements.

Unauthorized Fees Charged For Services Not Agreed Upon In Contract, Lawsuit Claims

Despite agreeing to specific rates and fees in their contracts, merchants like ASA have found themselves being charged for services they never authorized, it says.

For instance, CardConnect charged ASA fees as high as $199.99 for "Annual Compliance SVC Fee," and $215 for an "Annual Fee Security Bundle"—neither of which were mentioned in the original agreement, the company alleges.

This is not the first time CardConnect has faced legal action for its billing practices. In 2016, frustrated customers sued CardConnect in the Eastern District of Pennsylvania, seeking to recover unauthorized fees and to stop the company from imposing unagreed-upon charges. The company in 2021 agreed to pay $7.65 million to settle the class action.

CardConnect Allegedly Continues Imposing Unauthorized Fees Despite Court Orders

Despite court orders since then limiting CardConnect to the fees identified in the Merchant Agreement, the company allegedly continues to impose these additional charges, the lawsuit alleges.

ASA says the situation even worsened in 2024, when the company allegedly began charging a series of fees such as a $200 "Annual Membership Fee" in Feb. 2024, which ASA asserts was never agreed upon in any agreement.

In the CardConnect unauthorized fees class action lawsuit, ASA is seeking to represent any entity in the United States that was charged unauthorized fees by CardConnect after July 8, 2020. It is seeking certification of the class action, damages, fees, costs and a jury trial. 

Case Details

  • Lawsuit: Richard E. Obringer PAC v. CardConnect Corporation
  • Case Number: 2:24-cv-03034
  • Court: U.S. District Court for the Eastern District of Pennsylvania

Plaintiffs' Attorneys

  • Kenneth Jay Grunfeld, Jeff Ostrow and Jonathan Streisfeld (Kopelowitz Ostrow)
  • Hassan A. Zavareei, Katherine M. Aizpuru (Tycko & Zavareei LLP) 

Have you experienced any unauthorized fees or billing discrepancies from payment processors like CardConnect? Share your experiences in the comments below.

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