November 11, 2021 – PNC Agrees to Settle with Merchants
PNC Merchant Services has agreed to settle the allegations in two consolidated lawsuits, including the one detailed on this page, in a deal estimated to cover more than 200,000 merchants.
Under the terms of the proposed settlement, PNC will pay up to $10 million in cash benefits to merchants who entered into a payment card processing service contract with the defendant and paid one or more fees—including annual fees, early termination fees and paper statement fees assessed at least three months after they became a customer—between October 26, 2011 and the date the settlement receives preliminary approval.
According to a November 8 memo, cash benefits will be automatically issued to current PNC customers in the form of an account credit while former customers will be able to submit a claim for a check.
In addition to cash payments, the proposed settlement also looks to provide significant non-monetary relief in the form of “important practice changes.” More specifically, PNC has agreed to give customers who are currently on a pricing plan that includes an annual fee an option to switch to a plan with no annual fee. For those who choose not to switch plans, PNC will provide, for the next five years, an additional 30 days’ advance notice prior to assessing the annual fee, which will allow customers an opportunity to cancel their services before the fee is assessed.
Moreover, PNC will, for the next five years, maintain its practice of waiving early termination fees and will require customers who never agreed to pay a fee for receiving paper statements to acknowledge that such fees will be assessed before charging them a paper statement fee.
The plaintiffs note that these practice changes provide merchants “ample opportunity” to avoid paying the fees at issue in the litigation.
If the proposed settlement is approved, a settlement website will be established to provide more information on the deal and allow former customers to file claims.
Two business have put their names on a lawsuit in which they accuse PNC Merchant Services Company, L.P. of overbilling customers. According to the lawsuit, the defendant charges “unanticipated and excessive fees” for its payment processing services while evading detection by depriving merchants of monthly billing statements.
The suit claims PNC’s sales agents aggressively promote the defendant’s payment processing services while misrepresenting the governing contracts’ terms. According to the case, this is done to keep potential customers, i.e. businesses or individuals who receive payment through credit/debit cards, in the dark concerning the company’s fee practices. Once merchants have signed long-term contracts, the suit says, the defendant supposedly adds or marks up fees without disclosing such charges to customers. In fact, the case continues, the defendant automatically opts new customers out of receiving itemized monthly billing statements, and only surrenders the information for an additional monthly fee “if merchants persist.”
“Without detailed monthly statements, customers are forced to learn of the amounts taken by Defendant by consulting their PNC Bank checking account statements,” the complaint reads, adding that the account statements provide no detail about specific charges and make it “impossible” for customers to determine whether they have been overcharged.
The suit claims merchants “would never agree to do business” with the defendant if they were fully aware of PNC’s deceptive practices and excessive fees.