Rome LLP has filed a class action lawsuit on behalf of two California-based businesses, Anaru Endeavors, Inc. and Pabby Co, Inc., against Signature Payments, LLC and Merrick Bank Corporation. The action details systematic breaches of contract involving the improper withholding of substantial merchant reserve funds after the termination of payment processing relationships.
The lawsuit seeks to recover compensatory damages for affected merchants and obtain injunctive relief to prevent the continuation of these practices. The proposed class includes businesses that contracted with Signature Payments, LLC and Merrick Bank Corporation for payment processing services and were subject to similar withholding of funds without justification or transparency.
Improper withholding of reserve funds after termination violates payment processing agreements and Card Brand Rules
According to custom and practice in the payments industry, all parties to a merchant agreement must strictly comply with the terms of the agreement as well as all incorporated Card Brand Rules. As such, reserve funds must be returned to the merchant after a set period, usually six months, once the business relationship ends, unless there are specific, valid liabilities. The class action outlines the following:
- Signature Payments, LLC and Merrick Bank Corporation withheld reserve funds long after the allowed timeframe had passed
- There was no valid reason or written explanation provided for the continued withholding of funds
- Many other merchants may have been subjected to similar deceptive practices
Who qualifies for the Class Action: merchants impacted by wrongful reserve fund withholding
The proposed class includes all merchants who:
- Entered into standard-form merchant agreements through Signature Payments, LLC and Merrick Bank Corporation
- Had funds withheld in reserve accounts following termination of the processing relationship
- Did not receive timely disbursement of those funds after expiration of the risk period
Merchants that believe they may have been subjected to improperly withheld funds are encouraged to contact Eugene Rome or Bradley O. Cebeci to learn more and speak with our experienced payments litigation team.
Read the full complaint here.
Experienced Attorneys for payment processing and reserve fund disputes
Based in Los Angeles, Rome LLP specializes in electronic payments litigation and complex business disputes nationwide. Eugene Rome and Bradley O. Cebeci alone have more than 30 years of combined experience litigating payment processing disputes. Rome LLP regularly represents “high-risk” merchants, sales agents, ISOs, payfacs, platforms, marketplaces, and acquirers, and routinely handles litigation and transactional matters on their behalf which traverse all aspects of payments law.
Contacts
Eugene Rome
[email protected]
(424) 544-3071
Bradley O. Cebeci
[email protected]
