Five companies that provided local authorities with prepaid cards for vulnerable people have been fined more than £33m by the UK regulator for ‘cartel behaviour’.
The Payment Systems Regulator (PSR) found the five parties infringed competition law by agreeing not to compete or poach each other’s customers in the prepaid cards market.
The cards were used by local authorities to distribute welfare payments to vulnerable people such as the homeless, victims of domestic violence and asylum seekers.
The PSR found there were two market sharing cartels in the prepaid cards market in violation of the Competition Act 1998.
During the PSR investigation, Mastercard, PFS, allpay, APSand Sulio admitted breaking the law and settled.
Chris Hemsley, managing director of the Payment Systems Regulator, said: ‘This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour. We will intervene and enforce the law strictly to ensure there is effective competition in payments markets.
’This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.’
