Quick Index
 Adult Industry News
Search AINews Database
Type Keyword or Phrase Here
Are you TOUGH ENOUGH for Joanna Angel? EXPO 2014, August 24-27, Mandalay Bay, Las Vegas
   
 

Front Page
Film News
Media News
Business News
Clubs & Appearances
Law & Politics
Internet & Mobile News
Lifestyles Arts Health Charity
Letters to the Editor
Columns
Movie Spotlight Reviews
Interviews
Pornstar Pages
AINews Staff
Ad Rates
PR 101: Press Release Service

Caliente Nudist Vacations!

Kayden Kross at Twistys

May 12, 2003 03:20pm
Paycom / Epoch Sues MasterCard
Source: Paycom / Epoch
by: Company Press Release

From the desk of Chris Mallick, CEO - Epoch / Paycom: Today Paycom / Epoch sued MasterCard International in Federal Court in Los Angeles. Our suit alleges Anti Trust violations, Fraud and Unfair Trade Practices by MasterCard against Paycom / Epoch and Internet merchants in the so-called "high- risk" space. The lawsuit may be found at: Paycom.net/MasterCard/lawsuit.pdf. We suggest reading the entire lawsuit if you have time. If not, pages 21 - 44 tell the story of why we are suing.

We will continue to accept MasterCard during and after this lawsuit.

Paycom / Epoch made a decision that the only way to ensure the long term ability of our business, that of our clients and that of the other high risk internet merchants to accept MasterCard was to file this lawsuit. We tried everything to avoid this, but MasterCard has simply become too unreasonable to deal with in our marketplace.

There is no simple way to explain this lawsuit. However, in an effort to give you the basics, here are the main issues:

MasterCard has set the chargeback ratio for high-risk Internet merchants at 1%. MasterCard has also said that when a Merchant's credits exceed its chargebacks, it will count credits as chargebacks. However, credits almost always exceed chargebacks, so MasterCard has in effect made a rule that the combined chargeback and credit ratio must be below 1%. If Paycom / Epoch (or any high risk Internet merchant) goes over the 1% threshold for 2 consecutive months, then MasterCard can impose fines of up to $100 per chargeback and credit plus $100K per month. It has also said that it has the right to continue to impose these fines for at least 12 months even if we are under the 1% ratio during those months.

You can see why this is an impossible situation when you consider, for example, that because of MasterCard's "Zero Liability" policy, we must issue a credit whenever a card holder claims that he or she did not authorize a charge. MasterCard is now penalizing us for following its rules by issuing credits. But, if we refuse to issue credits, MasterCard will punish us anyway since those cardholders will charge back. It is simply an unacceptable situation.

To make this issue even more onerous, MasterCard counts known stolen cards against us in calculating the ratios. For example: DPI was hacked and hackers got 13 million card numbers (about 5 million or so were MasterCards). MasterCard knows which cards were compromised, but has not canceled those cards nor will it give us a list of the compromised accounts numbers so we can block them in our system. The result is that criminals can buy the card numbers from the hackers, sign up as resellers, run the cards through our system; and MasterCard places the full liability for that fraud on our clients' and our shoulders.

Paycom / Epoch was also fined late last week approximately $1.5 million for being in the "Excessive Chargeback Program." However, a fine should not have been imposed. MasterCard did not have right to fine us under its rules, and it will not even give us the courtesy of an explanation as to why it imposed the fine. We are not passing those fines to our clients at this time, even though we have the right to do so. Instead we are standing up for the industry and fighting for our collective rights in this litigation.

MasterCard is a monopoly, as a United States Federal District Court has already determined. As such, a monopoly like MasterCard has a duty and an obligation to treat us fairly as a class of merchants. We are going to try and make sure it lives up to that duty. Wal-Mart did. Home Depot will. We know we are not Wal-Mart or Home Depot, but we are entitled to insist on fair treatment just like they are.

We expect a great number of questions so we are staying late tonight to answer as many as we can. The lawsuit speaks for itself, but we know you will want and that you deserve direct answers. Paycom / Epoch clients are encouraged to email questions as well, indicating your Master Code in the Subject line.

Please email any processing questions to rand@Paycom.net. Rest assured, processing will not be interrupted and payments will not be affected.

---
Rand at Epoch
Director of Corporate Communications
rand@EpochSystems.com

The following is a formal press release:

For Immediate release

May 12, 2003

MasterCard Sued for Antitrust Violations & Fraud

(MARINA DEL REY, CA) -- Paycom Billing Services, Inc., an Internet Payment Service Provider, processing credit card and check transactions for Internet merchants, filed a multi-million dollar lawsuit today in Federal Court in Los Angeles against MasterCard International for antitrust violations, fraud and other issues.

Paycom's suit alleges that MasterCard has established monopolistic rules that allow it unreasonable discretion to dominate Internet merchants, and it has exercised this power to illegally impose fines and penalties in the millions of dollars.

Former Federal Prosecutors for the Us Department of Justice, William McD. Miller and Richard P. Crane, Jr. Of the Los Angeles law firm Musick, Peeler & Garrett LLP and Dennis M. P. Ehling, filed the lawsuit on behalf of the Plaintiff. Mr. Crane stated, "A United States Federal District Court has already determined that MasterCard is a monopoly. MasterCard's continued unfair dealings and the imposition of baseless fines, penalties and fees on Internet merchants, such as Paycom, simply prove the abusive control that one finds in a monopoly."

Paycom's Chief Executive Officer, Christopher Mallick, commented "We are in compliance with MasterCard's rules as a merchant, yet they fine us millions of dollars. Paycom has been directed to change its entire business structure, indeed to change the way in which E-commerce works, to comply with additional rules from MasterCard; rules that MasterCard cannot or will not articulate or explain." Mallick added, "These rules are unreasonable and demonstrate MasterCard's intent to continue to economically bully Internet merchants. Paycom has a responsibility to our employees and our clients. The intent of this lawsuit is to force MasterCard to treat us and other Internet merchants fairly and to permit us to operate as any other merchant class. This is a business that we built on our ability to accept MasterCard, one of the only currencies available for online shoppers."

The litigation alleges MasterCard violated several Federal and California State laws including violations of Federal and California State anti-trust laws, denial of fair procedures, unfair competition, fraud, breach of contract and breach of implied covenants of good faith and fair dealing, intentional interference with Paycom's contractual relationships, and intentional and negligent interference with Paycom's prospective business advantage, and seeks damages, declaratory and injunctive relief.

Paycom's lawsuit may be found at Paycom.net/mastercard/lawsuit.pdf

All inquiries should be directed to: Dennis M. P. Ehling, Esq. Musick, Peeler & Garrett, LLP
Telephone: 213-629-7600 or by email: D.Ehling@MPGlaw.com

Are you TOUGH ENOUGH for Joanna Angel?

Related Stories

Related Sites - WARNING! Graphic Content

RavenBay02.3gp

See BiBi Jones at Digital Playground

Top Stories

Nikki Delano at Centerfolds

Karen Summer Returns

Advertise on AINews

Cytherea Auctions Fan Scene

Evil Pin-Ups Karaoke XXX

Monique Alexander in Houston

Reader Comments on Adult Industry

Tribute to Christian Mann

This week on RNSU

TTS Welcomes Bobi & Jen

Sheila Marie on Reality TV

Testing the Waters

Cutting Edge Changes Staff

MWA: 07/23/14

MWA: 07/22/14

MWA: 07/21/14

Tweets = Cash with PornPitch

Proud Parents ~ Reviewer Rated

RNSU July 17

Next Day Test in LV

MWA: 07/13/14

Condomless Sex

The Goddess Lives

A Legend Looks Back

Nikki Phoenix Hosts Palomino

RNSU Thurs July 10

Nikki Delano at Crazy Horse

Resurgence of the Goddess

Pornstar Graduates Law School

July 3 Rock-N-SeXXXy-Uncencored

More on Belle Knox

Morgan Del Ray Karaoke XXX

MWA: 05/21/14

The Temptation of Eve ~ Reviewer Rated

Cumisha Amado on Vivid Radio

Yoga for Lovers

She's Judas & Available

Nikki Delano on Jukeboxx

Lapdance Lingerie in Neighbors

XRCO Welcomes Rich Hansen

IIM Party June 13

Hustler EDM Maniac Party

Layla Price Stars

Julia Sands Karaoke XXX

Susana Molina in Baci Lingerie

Fetish Con Dates

Porn's Greatest Star

James Deen June Promo

Exxxotica Exhibitors Lining Up

AdultVerifiedVideoChat iPad Contest

Sunny Leone Hosts Splitsvilla

Porn Star Game Night

Camming Con Moves Dates

Discount Club Owners Expo Tickets

Teal Conrad at Sapphire NYC

Exquisite Distributes DDF

Cherie Deville Returns

Alana Evans at WonderCon

Risque Starr Sisters Parties

Natasha Voya PSK

The Sexual Liberation of Anna Lee ~ Reviewer Rated

Carter Cruise at Exxxotica

Belle Knox at Exxxotica

Rock'N'SeXXXy & Hustler

Puma Swede Opens Desire

Nikki Phoenix XRCO Nom

Maddy O'Reilly is Slutwoman

Alex Chance jGrrl

Tony Batman Conquers LA

Alexa Aimes NYC Tour

2014 AVN News Rack Part 2

Roxanne Rae Available

Minka Karaoke XXX

Rio Lee Heads Cherry Pimps

Immoral Mayhem

XRCO Sponsorship Opportunities

Rotten Hosting Vivid Radio

Cherie Deville Available

Tony Batman Crazy Appearances

Inside The Industry 03/19/2014

Chanel Preston Interview

Alicia Silver Productions Content

Adrianna Luna Dance Dates

Entertainment is Entertainment is Entertainment

More
Stories From

Law & Politics

Pornstar Graduates Law School

AHF Against AB 999

CraigsErotica Letter to Senators

Amazon Crushes Small Business

Letter of Equality

ASACP Service Recognition Award

Suit Filed Challenging Measure B

ASACP Ready For Internext

Octomom Loses Civil Suit

ASACP at XBIZ 360

Crakmedia ASACP Corporate Sponsor

Mo Reese Statement

CAM4 Newest ASACP Sponsor

Mo Reese FSC Nom

Amber Lynn Seeks FSC Board

Suit Against Measure B

Law Puts Con in Condom

No on B: Here's Why

NO on B Campaign

NO on B Bus Tour

GFY: Vote No on B

Margold on Erection Election

Alex Chance in Documentary

Yahshua: No On B

No On 35 Rally

Why No On B

Measure B Threatens Freedom

Measure B Protest Video

No On B Raffle

Alia Janine: No On B

AHF Vilifies Porn

No on B Event

Alia Janine Against Measure B

Fight Measure B

Takedown Piracy Removes 10,000,000

John Stagliano Keynotes CatalystCon

Hirsch Blasts Trueman

Hirsch Cautions GOP

LATATA Files Injunction

Child Porn Hotline Increased

Vette Scores on AFF

Nicole Houde Assault Arrest

YouJizz Sued

Dickinson Defends Travolta

Kardashian/Humphries Divorce Deposition

Three Stooges Porn Controversy

Suing: Wasn't Sexy Enough

Lords of Acid Censored

Nate Glass on CNBC

Law & Politics Section Index

     
Copyright © 1998 - 2014 Adult Industry News (AINews.com)
All materials constituting text, articles, press releases, stories, columns, photographs, graphics, and code on the AINews.com domain are protected by copyright, and either owned by Adult Industry News (AINews.com), or reproduced with permission from other copyright owners. It may be downloaded and printed for personal reference, but not otherwise copied, altered in any way, or transmitted to others, without the written permission of Adult Industry News (AINews.com).