Five payment companies, including Mastercard, have been fined a total of more than £33 million (US$45 million) for operating illegal cartels when providing prepaid cards for local authorities to distribute to vulnerable people.
The companies were found by the Payment Systems Regulator (PSR) to have broken competition law by agreeing not to compete with each other for the authorities’ custom.
The regulator stated that by acting in this way, the providers may have denied the councils access to cheaper products, and vulnerable people may have missed out on better quality services.
The cards in question were used to distribute welfare payments to vulnerable members of society, such as the homeless, victims of domestic violence, and asylum seekers.
Benefits payments or emergency funds could be uploaded to the cards and used to pay for goods and services without the holder needing access to a bank account.
The PSR launched an investigation in October 2017 and carried out dawn raids on premises in February 2018.
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