TAMPA, Fla.–A Georgia-based financial services firm has filed suit against Suncoast Credit Union alleging it reneged on a contract, but the credit union is strongly denying the allegations.
Econ-O-Check filed the lawsuit in federal court in Tampa, alleging breach of contract and fraudulent inducement. The breach cost at least $2 million in damages, the lawsuit states, according to the St. Petersburg Catalyst. Stockbridge, Ga.-based Econ-O-Check, offers checking account enhancement services to financial institutions.
According to the lawsuit, Econ-O-Check and Suncoast signed an agreement in January 2018, under which Suncoast said it would establish and promote Econ-O-Check’s secure checking program in its branches beginning on April 1, 2018, the Catalyst reported.
Decision Against Launch
“The initial term of program was for three years. Suncoast was obligated to report to Econ-O-Check the total number of secure checking program accounts monthly, and pay the company a monthly fee of $1.95 per enrollee, with a minimum monthly payment of $1,000, the complaint said,” according to the Catalyst. “Suncoast failed to establish the program on April 1, and on Sept. 11, Darlene Johnson, Suncoast’s chief operating officer, confirmed to Econ-O-Check that Suncoast decided not to launch the program, the complaint said.”
On Oct. 1, after months of informal discussions, Econ-O-Check formally notified Suncoast that it was in breach of the contract, according to the complaint, the report added. “Econ-O-Check proposed a forbearance agreement in November, giving Suncoast time to cure its breach, but the parties negotiated for seven months without reaching a final agreement, the complaint said,” according to the Catalyst.
‘No Merit’ to Suit
Econ-O-Check is asking for a jury trial, and that it be awarded damages and legal fees.
In response, a Suncoast spokesperson told the Catalyst, “They simply have no merit and we will aggressively defend our organization against the charges.”
The $9.8-billion Suncoast CU has approximately 826,000 members.