Subway customers who used a debit or credit card to purchase food or other items at the popular fast food chain Subway could be eligible for a large $30.9 million subway class action settlement, according to legal experts. Subway lead plaintiffs claimed in a class action lawsuit filed in New York City federal court that Subway illegally violated the Fair and Accurate Transactions Act (FATA) by incorrectly stating the expiration date of its and other consumers’ credit and debit cards.
Subway is one of the largest franchisees in the U.S., serving more than 60 million Americans and counting. Subway stores are located in the United States, Canada, Spain, and the United Kingdom. The company also has outlets in Japan.
Subway has denied the allegations in the Subway class-action lawsuit. “These allegations are unsubstantiated by any facts and the complaint fails to provide any legal basis for bringing this suit,” Subway spokeswoman Lisa McComb said in an emailed statement. Subway’s parent company Aramark is the one responsible for issuing debit and credit cards to Subway restaurants and employees.
Subway is seeking an award of monetary damages in excess of $100 million. Subway restaurant workers claim that Aramark failed to properly process its debit and credit card processing transactions. The lawsuit also charges Aramark to provide inaccurate billing statements to Subway restaurant owners.
The lawsuit, which is being brought under a United States law known as the Federal False Claims Act, seeks a recovery of unpaid balances that consumers incurred when using their credit or debit cards at the Eurostar or Europa Lines of the European subsidiary of the company. The company has alleged that Eurostar and Europa Line ridership records were falsified to cover up these unauthorized transactions.
In response to the Subway Class Action Lawsuit, Aramark issued a statement saying it does not conduct any business activities in the United States and is an independent contractor of the European subsidiary. It says that it conducts all its transactions through the European subsidiary and that it is not liable to pay claims by Subway or Eurostar customers. or any Subway franchisee.
Subway is not the only Subway outlet to come under investigation for similar claims of misdeeds by Aramark. Some other Subway locations include those in Chicago and Washington, D.C.
Aramark was recently criticized by the Federal Trade Commission over accusations that it provided false information and inflated the number of transactions processed by its European subsidiary to justify higher billing charges. The FTC declined to sue the company but instead referred the matter to the Department of Justice.
The United States government is conducting an investigation into the practices of the European subsidiary of the company. There have been numerous complaints that it has charged higher rates than the rest of the industry for the same types of transactions. In some instances, the company charged more than three times what a single charge would cost in other locations.
The European subsidiary of Aramark has been criticized for providing inaccurate billing statements to Subway restaurant owners, failing to deliver invoices on time and denying that it had billed the restaurant or franchisee a specific amount of money for the same transaction. It is also accused of not providing proof of its billing processes or statements to the Internal Revenue Service or other governmental agencies.
According to the Subway class action lawsuit, the European subsidiary of the company has billed the sandwich chain for services that are not even provided by other companies. The lawsuit claims that the company failed to provide receipts for the purchase of products such as food, beverages and other items at its stores. This included not including the price of alcoholic beverages in a statement that is used to calculate the cost of payments.
In addition to charging higher rates, the lawsuit claims that the European subsidiary of the company has billed the sandwich chain for the use of a cashier’s card to withdraw cash from a bank account. In addition, it charges higher than permitted amounts for the use of its credit or debit cards in Europe.
