ATLANTA, Jan. 17, 2012 /PRNewswire/ -- nFinanSe, Inc.
(OTCBB: NFSE)( www.nFinanSe.com), a leading provider of
general purpose reloadable (GPR) prepaid debit cards, today filed a
motion for preliminary injunction to prevent card distributor
Interactive Communications International, Inc., or InComm, from
operating its new Vanilla Reload Network because the network
constitutes an illegal price-fixing conspiracy.
In the motion, nFinanSe argues that the injunction is necessary
to protect consumers from price-fixing by InComm and to prevent
harm to nFinanSe's business. The motion further alleges that
InComm's Reload Network is illegal under federal antitrust law
because it requires competitors – other prepaid card providers – to
fix the reload price paid by consumers for GPR cards that would
otherwise compete on price.
"InComm has not only caused nFinanSe to suffer lost business
opportunities and exclusion from key markets," nFinanSe argues in
its motion, "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."
On Oct. 31, 2011, nFinanSe, of
Tampa, FL, filed an antitrust suit
(Case No. 1:11-CV-3728) in U.S. District Court in Atlanta against Atlanta-based InComm, accusing it of trying to
coerce nFinanSe into joining its new network and of punishing
nFinanSe when it refused to join.
nFinanSe's prices for the increasingly popular cards are widely
recognized as the lowest in the industry, which totals
approximately $100 billion in annual
funds loaded. In order to join the Vanilla Reload Network, nFinanSe
would have had to agree to raise its reload fee from $2.95 to $3.95 – the uniform fee that the brief
alleges all network participants must charge. nFinanSe recognized
that it was illegal for competitors to fix prices and so refused to
join. The motion alleges that, in retaliation, InComm has refused
to distribute nFinanSe's cards to new retail outlets, in violation
of its longstanding distribution contract, and is threatening to
stop distributing all nFinanSe cards.
InComm is the industry's largest distributor of cards and it
also provides cards of its own that compete directly with
nFinanSe's. nFinanSe, which relies on InComm to distribute 90% of
its GPR cards, contends that InComm saw nFinanSe's low fees as a
threat to its own higher-priced cards and so wielded its dominant
market position as a sledgehammer.
"Even though nFinanSe declined InComm's invitation to join the
Reload Network, nFinanSe has not escaped its consequences," the
motion alleges. "Because nFinanSe rejected InComm's demands that
nFinanSe raise its prices, including by joining the Reload Network,
InComm has breached the parties' distribution contracts and
threatened to dissolve the parties' business relationship, which
will exclude nFinanSe's competing GPR cards from vast retail market
segments."
InComm touts the Vanilla Reload Network as a way to improve
efficiency and provide retailers who sell GPR cards with a common
platform through which they can offer reloads for the cards.
nFinanSe argues that there is no business reason to require network
participants to charge uniform prices.
"Safe Harbor" Statement under Private Securities Litigation
Reform Act of 1995
This press release contains certain forward-looking statements
based on nFinanSe Inc.'s, or, the Company's current expectations,
forecasts and assumptions that involve risks and uncertainties.
Forward-looking statements include statements regarding the
Company's expectations, beliefs, intentions or strategies regarding
the future and can be identified by forward-looking words such as
"anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "should," "will," and "would" or similar words and include
statements regarding the anticipated benefits of the Company's
products and the anticipated roll out of the Company's products.
Forward-looking statements in this release are based on information
available to the Company as of the date hereof. The Company's
actual results may differ materially from those stated or implied
in such forward-looking statements due to risks and uncertainties
associated with the Company's business, which include the Company's
ability to execute its business strategy and the other risk factors
disclosed in the Annual Report on Form 10-K for the year ended
January 2, 2010 on file with the
Securities and Exchange Commission. The Company assumes no
obligation to update the information included in this press
release, whether as a result of new information, future events or
otherwise.
About nFinanSe Inc.
nFinanSe Inc. (OTC Bulletin Board: NFSE) is an innovative
financial services company and provider of stored value and prepaid
card solutions headquartered in Tampa,
Florida. nFinanSe has developed the nFinanSe Network™, a
secure, reliable value load and activation platform that connects
with retail merchants and other value load stations located
throughout the United States. For
more information, visit www.nFinanSe.com.
SOURCE nFinanSe, Inc.