Lawsuit Accuses FLEETCOR Of Anticompetitive Payment Processing

A lawsuit filed this week by Gas Pos, a fuel station point-of-sale startup, is accusing fleet card company FLEETCOR of anticompetitive behavior and adding to the growing controversy over fees associated with processing and using fleet cards.

According to documents obtained by Bloomberg Law, Gas Pos Inc. filed a lawsuit against FLEETCOR Technologies on May 5 in an Alabama U.S. District Court accusing the firm of monopolizing the fleet card and truck stop payment processing market.

The publication said Tuesday (May 6) that the lawsuit accuses the fleet card firm “of using exclusive dealing arrangements and other restrictions” to dominate the industry via its subsidiary Comdata Network. The lawsuit claims Comdata unfairly refuses to process fleet cards issued by FLEETCOR competitors at its point-of-sale systems, and refuses to licenses competing payment systems to process Comdata cards.

In a statement provided to PYMNTS, Gas Pos Chief Legal Officer Cameron Hogan declined to comment on the specifics of the lawsuit, but emphasized the need for fair business practices in the fleet payments industry.

“The current leaders in this industry must be held accountable at times to ensure competitive markets and fair pricing,” he said. “This benefits not only businesses in the point of sale markets, but al the gas stations, truck stops, fleets and ultimately consumers and the American people benefit from competition and fair pricing in this incredibly important market.”

FLEETCOR did not respond to requests for comment.

Gas Pos’s filing comes just weeks after the company announced a partnership with cloud communications platform Twilio to launch a virtual payment system to allowing retailers to process FLEETCOR/Comdata and WEX fleet card transactions, according to February reports in Convenience Store Decisions.

The companies said in their announcement at the time that their collaboration aimed to “shift the balance of control in the truck stop payment ecosystem,” enabling fuel retailers to accept FLEETCOR/Comdata and WEX fleet cards and combat the “‘Goliath’ Problem” of “oligopolies.”

A History of Complaints

“In 2018, Gas Pos set about tackling the unfair ways in which gas stations were being pinched between extortionately high technology and payment processing costs and the desires to provide a secure and easy way for their customers to pay for their goods and services,” the company said. “Fuel retailers lose billions a year due to the fees charged by fleet fuel card networks such as those provided by WEX’s EFS and FLEETCOR’s Comdata.”

The company said that in some cases, those fees can amount to a truck stop owner’s entire net profits for a year.

In a statement, Gas Pos CEO Joshua Smith said the company is partnering with Twilio “to right a wrong and open up the network.”

In 2017 Reuters reported that a Delaware court sided with TravelCenters of America, which had sued FLEETCOR over merchant fees. The truck stop operator said FLEETCOR unfairly hiked fleet card processing fees and forced TravelCenters to invest in technology upgrades.

In 2014 Comdata announced a settlement with a class of U.S. fuel retailers in Pennsylvania worth $130 million. That agreement settled a lawsuit filed in 2007 against Comdata and its then parent company Cerdian.

FLEETCOR has also seen its share of controversy related to fees, though the latest debate has centered on fees charged to end users of the company’s fleet card products.

Earlier this year Bloomberg said small businesses have raised concerns over the fees FLEETCOR charges to use fleet cards, with reports noting that the firm, which posted $2.2 billion in revenue since its 2010 initial public offering (IPO), charges more than 12 fees that fleet operators must charge.

Those fees include $0.10-per-gallon of fuel and a $2 per-transaction fee, cited as an account administration charge. Reports said customers are also charged to pay their bills via wire transfer, as well as if fleet cards go unused.

“The company figures out the easiest way to make money,” said former FLEETCOR executive Jeff Lamb in an interview with Bloomberg at the time. “That’s not a dumb thing to do — that’s smart.”

FLEETCOR said that none of the fees it charges are unlawful, and all comply with regulatory requirements.

“The majority of our more than 800,000 business customers are very satisfied with the value we provide,” FLEETCOR said in a statement.

However, the news outlet found 366 complaints filed against FLEETCOR since 2014 with the Federal Trade Commission. That compares with just 44 complaints filed against FLEETCOR’s main rival, WEX, during that time.

“This is a business model intended to deceive,” said Citron Research founder Andrew Left in a previous interview with the outlet.

This article has been updated to reflect a comment provided by Gas Pos to PYMNTS.