Lowey Dannenberg Secures Preliminary Settlement Approval on behalf of Global Payments Investors

In 2022, Global Payments Inc. (“Global Payments”), a premier fintech company that provides payment processing solutions, became entangled in a federal enforcement action brought by the Consumer Financial Protection Bureau (“CFPB”) against Active Network LLC (“Active”), Global Payments’ wholly owned subsidiary. Active, which offers event registration and payment processing services, had allegedly been engaging in deceptive practices by engaging in “dark patterns,” or the creation of user interface designs intended to mislead consumers into performing actions they otherwise wouldn’t, such as subscribing to unwanted services or paying hidden fees. Active’s dark patterns allegedly included misleading marketing, misrepresentations of benefits, and hidden fees to entice customers into joining and remaining enrolled in its discount club, thereby violating consumer protection laws.

Lowey Dannenberg pursued a securities class action against Global Payments, alleging Global Payments misled investors with respect to its legal compliance and failed to disclose Active’s misconduct. Despite Global Payments’ alleged knowledge of these of these tactics, Global Payments allegedly failed to halt its subsidiary’s deceptive practices. Instead, the complaint alleged that Global Payments made false and misleading statements, emphasizing the integrity of its operations, its revenues’ sustainability, and noting that at all relevant times, Global Payments was “currently in compliance with the existing legal and regulatory requirements.” Lowey’s investigation uncovered multiple former Active Network employees who alleged that these practices were well known within the company and that it received an onslaught of complaints and refund requests from consumers. Global Payments’ assurances of legal compliance continued until October 18, 2022, when the CFPB filed an action against Active for illegally imposing membership fees on consumers. The complaint alleged that this caused Global Payments’ stock price to drop, injuring investors.

Recently, Lowey achieved a $3.6 million settlement for investors in Global Payments, Inc. with the case being led by Andrea Farah and Alesandra Greco of Lowey Dannenberg, and Co-Lead Counsel Jonathan Park of Pomerantz LLP