Tuesday, January 17, 2012
General purpose reloadable (GPR) prepaid card provider nFinanSe Inc. wants prepaid card distributor InComm to stop operating its Vanilla Reload Network. In a preliminary injunction filed Jan. 17, 2012, in the Atlanta division of the U.S. District Court – Northern District of Georgia, nFinanSe claims InComm's network constitutes an "illegal price-fixing conspiracy."
In the motion, nFinanSe said the injunction is necessary to protect consumers from price-fixing by InComm and to prevent harm to nFinanSe's business. Furthermore, the motion alleges that InComm's network violates federal antitrust law because it requires prepaid card providers that utilize the network to fix the price it charges GPR cardholders to reload their cards. NFinanSe charges a $2.95 reload fee while the Vanilla Reload Network reload fee is set at $3.95.
In order to join the Vanilla Reload Network, nFinanSe said it would have to raise its reload fee, and on those grounds refused to join the network. The GPR card provider alleges InComm then retaliated by refusing to distribute nFinanSe's cards to new retail outlets, in violation of their distribution agreement, and is threatening to stop distributing all of nFinanSe cards.
In October 2011, nFinanSe filed its antitrust lawsuit against InComm. NFinanSe said in a statement, "InComm has not only caused nFinanSe to suffer lost business opportunities and exclusion from key markets, but it has threatened to sever the parties' entire business relationship and effectively drive nFinanSe out of business for nFinanSe's refusal to participate in ... a network that InComm could not lawfully form and that nFinanSe could not lawfully join."
In November 2011, InComm countered that the Vanilla Reload Network is made available to partners at a generally accepted reload price point and that "nFinanSe is free to participate or not participate on those terms at its discretion." InComm added that "nFinanSe can continue to use its existing reload platform or any of the others available in the industry." InComm also noted that it reserves the right to select what products it distributes on its network.
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