PayPoint Faces A Multi-Million Lawsuit From Global 365
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PayPoint, a payments service provider based in the UK, is facing a major lawsuit filed by Global 365. The Global 365 social enterprise firm has accused PayPoint of engaging in anti-competitive practices in the prepayment industry.
PayPoint faces a multi-million lawsuit
The Global 365 social enterprise platform issued a statement saying that it had already started the legal process of taking action against the payments services company. Global 365 seeks to recover significant loss and damages following this lawsuit.
Global 365 faced some issues in releasing its own prepayment platform that seeks to solve the problems that are being faced in the energy industry. This prepayment system seeks to lower the fuel poverty levels by allowing energy suppliers to enjoy price parity between the customers that are depending on prepayment services and those using credit.
According to Global 365, it was forced out of the market, after which PayPoint took advantage of the situation and secured exclusive agreement deals with some of the largest energy suppliers in the UK.
PayPoint’s move to secure exclusive partnership deals allegedly resulted in Global 365 being unable to launch its prepay system according to its plans. The company is also saying that PayPoint has been abusing the dominant position it holds in the industry by imposing restrictions on contracts.
Global 365 took its concerns on the anti-competitive practices by PayPoint to Ofgem. The agency launched an investigation on the matter. In 2021, the regulator reached a provisional view alleging that the payments service provider participated in conduct seeking to restrict other suppliers in the energy industry from accessing the energy prepayment space.
PayPoint has also been linked to making voluntary commitments to removing and not enforcing the offending clauses. The payment service company has now agreed to make a donation of £12.5 million to the voluntary redress fund that is supported by Ofgem.
PayPoint accused of anti-competitive practices
Global 365 is a company that is represented by the Addleshaw Goddard law firm. The firm is now bringing its own legal proceedings before the Competition Appeal Tribunal. Another claim has also been registered against PayPoint, claiming that the company was in violation of Chapter II of the Competition Act 1998.
A similar case has been filed against PayPoint by the Utilita energy supplier. Utilita wants to be paid £42 million in damages amid allegations that PayPoint overcharged the company for processing prepayment transactions on its behalf. The lawsuit also claims that PayPoint was prevented from contracting with other providers like Global 365 to access a lower price for its product.
The lawsuit appears to have been created to restore Global 365 to the position that it occupied if it had not been forced to shut down. The company was unable to enter the market effectively in 2019. As such, it has been unable to reach the suppliers that are currently dominating the market.
