LV firm in litigation over credit card billing services

Tuesday, Aug. 14, 2001 | 10:26 a.m.

A Las Vegas sports information retailer and media advertising company sued three credit card processing companies and a bank, alleging they illegally withheld about $800,000 of its funds.

National Sports Services Inc. sued ProvidentOne Payment Systems Inc. of Scottsdale, Ariz., Signature Card Services of Los Angeles, Equifax and Capital City Bank of Tallahassee, Fla., in Clark County District Court.

The company said the defendants failed to properly account for about $800,000, which it said was meant to be held as a reserve fund to be used to offset customer charge backs and other fees. The defendants, instead allegedly "commingled the reserve trust fund with the defendants' general funds and illegally dissipated and/or converted the reserve fund to their own personal use," the suit said.

Capital City Bank was accused of wrongfully placing National Sports on the Visa/MasterCard "Terminated Merchant File" list after the bank terminated its credit card processing agreement with ProvidentOne on March 23 and told National Sports to make arrangements with another sponsor merchant bank.

National Sports said the bank's move was "illegal, unjustified and libelous," because its decision to terminate its contract with National Sports wasn't due to the company's failure to comply with the agreement but was part of the bank's overall decision to terminate some 1,500 merchants under its credit card processing agreement with ProvidentOne.

The defendants declined comment.