PayPoint hits back at competition lawsuit as legal showdown looms
PayPoint has hit back at accusations it entered into anti-competitive agreements with energy suppliers in the prepayment market, and plans to “vigorously defend” its position ahead of a potential legal showdown.
The payment services business confirmed it was served with a claim by social enterprise Global 365 on Tuesday earlier this week, which it rejects “in its entirety.”
A spokesperson said: “PayPoint is continuing to take legal advice on this matter and its position is unchanged. It rejects the claim in its entirety, intends to vigorously defend its position and is confident it will succeed.”
Pay Point added that Global365 “over-estimates the opportunity available for the products” it offered and that the claim “demonstrates a fundamental misunderstanding of the energy market” and the relationships the company held with suppliers.
Global365 filed the claim against PayPoint this week in a bid to “recover significant loss and damage”, arguing it was not able to effectively launch its rival prepayment system because of PayPoint’s exclusive deals with suppliers, which it said was an abuse of its dominant position in the market.
The anti-fuel poverty group’s prepayment system aims to reduce fuel poverty by enabling energy suppliers to offer price parity between prepayment and credit customers
It previously complained to Ofgem, which subsequently opened an investigation and reached a provisional view in 2021 that PayPoint engaged in conduct that had the aim of restricting other suppliers entering the energy pre-payment market.
PayPoint then made “voluntary commitments” to remove and not enforce the offending clauses, donating £12.5m to Ofgem’s voluntary redress fund.
Global365 is bringing the case before the Competition Appeal Tribunal.
A similar case has already been filed against PayPoint by energy supplier Utilita. The energy supplier is seeking £42m in damages because it alleges that PayPoint overcharged it for processing prepayment transactions on its behalf as it was prevented from contracting with other providers, such as Global365, to obtain a lower price.
Global365 has been approached for comment.