Federal Court Grants Heartland Payment Systems’ Application for an Order to Show Cause Against VeriFone
Verifone/Heartland Spat Continues in Courts
PRINCETON, N.J.--PIN Payments News Blog--On Monday, the New Jersey Federal Court granted Heartland Payment Systems’ application for an order to show cause against VeriFone Holdings Inc. The return date for an expedited hearing on Heartland‘s injunction on its Lanham Act false-advertising claims was set for December 7, 2009. No motion to transfer these claims to the Northern District of California as requested by VeriFone was granted at the hearing. In addition, VeriFone took down the website that was using the Heartland name to lure Heartland customers.
The need for the court hearing resulted from the public relations attack VeriFone launched against Heartland last week claiming Heartland can no longer support its customers using VeriFone terminals.
“VeriFone is deliberately attempting to confuse our customers by making false claims that we cannot service VeriFone equipment,” commented Bob Carr, Heartland’s chairman and chief executive officer. “VeriFone wrongly asserts that we expect our merchants to contact VeriFone for direct support. We strongly encourage our customers NOT to register for it.”
According to Carr, providing confidential business information to VeriFone could put that information at risk. “There is no reason a hardware manufacturer needs that kind of data other than for the purpose of passing it to our competitors and VeriFone’s partners as new business leads.”
The discord between Heartland and VeriFone began when Heartland refused to work exclusively with VeriFone to produce “E3™” terminals featuring Heartland’s state-of-the-art end-to-end encryption technology.
“VeriFone demanded we use them as our sole E3 terminal provider. This is counter to our objective of making E3 quickly and widely available to merchants. Our refusal to have an exclusive arrangement with VeriFone infuriated that company,” Carr continued.
VeriFone also wanted to impose an unprecedented per-transaction fee/tax never before levied on processors, merchants or consumers ― a “junk fee” that comes with no added value or acceptance of any responsibility.
“This arbitrary fee would tax merchants ― and ultimately consumers ― for the enhanced security Heartland will offer with no junk fees. VeriFone’s fee would not deliver any additional or value-added services to our merchants or consumers. Heartland is not willing to pay this new recurring junk fee and pass it onto our customers or consumers.”
Carr reiterated that Heartland is fully capable ― and will remain fully capable ― of servicing its customers. Heartland is the only entity that can provide full service ― including ongoing service of VeriFone terminals ― to its customers. Heartland customers should NOT register for “uninterrupted continuation of support” as promoted by VeriFone.
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