Court action against credit union over debit card

One of the first credit unions to offer debit cards to its members is in a dispute over the alleged ending of a deal with a company which provided the service.

DCR Strategies Inc, a debit and pre-paid card provider based in Canada, yesterday sought an injunction preventing Bishopstown Credit Union in Cork, its chief executive Raymond Kenny, and another card provider, Credit Union Services Organisation (CUSO) Ireland Ltd, from using allegedly confidential information in relation to the card service.

The court heard CUSO has been involved in approaching nine other credit unions with a view to setting up debit card systems. Around 3,500 of Bishopstown Credit Union’s 22,000 members have a pre-paid Mastercard debit card.

Yesterday, Gary McCarthy, counsel for DCR, said his client was not now opposing the issuing of a CUSO-backed card to the Bishopstown Credit Union members but wants an order preventing CUSO entering into similar agreements with other credit unions using its confidential information.

Bishopstown Credit Union and DCR entered an agreement in Jun 2008 to provide the Mastercard debit card service, Ms Justice Mary Laffoy was told.

Frank O’Regan, DCR’s head of European operations, said in an affidavit that last year, when DCR proposed switching the card to Visa after the bank involved sold its card service, Bishopstown Credit Union repeatedly delayed sanction for the change. Mr O’Regan said he provided a large amount of information in response to the credit union’s queries and later discovered it had been wrongfully disclosed to CUSO and to Raymond Kenny.

Mr O’Regan said the result of this was that CUSO and Mr Kenny had obtained commercially sensitive and confidential information and gained unlawful advantage over its competitors, including DCR.

At no time did Bishopstown Credit Union give valid notice of its intention to terminate the 2008 agreement, he said.

In a replying affidavit, Mr Kenny of Bishopstown Credit Union said there was no commercial benefit to the credit union to enter into a Visa card offering rather than Mastercard as all the main clearing backs already offer Visa. CUSO is offering Mastercard, he said.

There is nothing sensitive or confidential about any of the information held by the defendants and is easily obtainable elsewhere, he said. The “supposed concern” about information appears to be “a ruse” designed to obtain an order that would compel BCU to continue its contract with DCR despite the fact that it has no legal obligation to do so, he said.

The hearing continues.