Suit: Consulting firm owed $1.5 million for providing savings plan to Foot Locker

By Jim Boyle | Nov 24, 2014

Edward Kang

A credit card auditing firm says that Foot Locker owes approximately $1.5 million after it implemented recommendations that saved the company millions in credit and debit card transaction fees, according to a breach of contract suit filed at the Delaware County Court of Common Pleas.

According to the suit filed by Vizant Technologies, based in Chadds Ford, Pa., the national sporting goods chain failed to compensate the consulting firm for providing a report and advice to cut down expenses from the credit card transactions. The suit seeks $1,448,320 to settle the contract, plus interest and cost of the suit.

The complaint says that representatives from Foot Locker agreed to a one year consulting contract with Vizant, which had the firm review the company's accounting records and develop a report analyzing Foot Locker's payment processing costs, recommendations to reduce the costs and processes by which the company can achieve reductions relating to per transaction item costs.

According to the suit, Vizant provided the report with two options, ignore the findings and cancel the consulting agreement, or enact the recommendations and enter into a fee agreement. The complaint says that Vizant's payment structure had the firm collecting its fee when Foot Locker realized savings as a result of following the report.

Vizant would receive 35 percent of any refund or reduction for the 12-month period. Foot Locker was required to make payment within 30 days of receiving the invoice, with 1.5 interest accruing for unpaid obligations.

"[Vizant] performed under the terms of the consulting agreement by providing the services as promised," the suit says. "{Foot Locker} has not paid for the services as promised."

The complaint says that Foot Locker provided some compensation, but still owes $1.4 million plus interest, broken down as follows:

  • $851,726 in unpaid refunds between July 2013 and March 2014

  • $92,729 in unpaid Visa debit corrections fees

  • $503,863 for refunds and reductions between April 2014 and July 2014

The plaintiffs claim that Foot Locker enjoyed an unjust enrichment by following the solicited recommendations without providing the agreed upon payment for the consulting services.

Vizant Technologies is represented by attorneys from Kang Haggerty & Fetbroyt in Philadelphia.

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