Global Payments, Inc. v. Incomm Financial Services, Inc
308 Ga. 842
Ga.2020Background
- InComm issues "Vanilla VISA" prepaid cards; thieves obtained cards and used them to buy goods and then submitted counterfeit electronic reversal (refund) transactions through different merchants.
- Merchants (the reversal merchants) transmitted reversal-transaction data to Global, a payment processor; Global relayed that unaltered data to the VISA network, which forwarded it to InComm.
- InComm posted the reversals and issued credits to merchants, enabling thieves to convert over $1.5 million across ~3,600 transactions.
- InComm did not allege Global created or altered the reversal transactions; it claimed Global negligently supplied the reversal data to the VISA network and thus was liable for negligent misrepresentation.
- The trial court dismissed InComm’s negligent-misrepresentation claim; the Court of Appeals reversed; the Georgia Supreme Court granted certiorari and reversed the Court of Appeals.
- The Supreme Court held InComm failed to allege that Global made false representations or had a duty to detect/refuse to transmit the reversal data, so the negligent-misrepresentation claim was deficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transmitting third-party-generated transaction data without alteration can constitute negligent misrepresentation | InComm: Global had a duty to exercise reasonable care in supplying transaction data and should be liable for transmitting "bogus data" | Global: It merely relayed accurate data from merchants and made no representation that transactions were legitimate | Held: No; negligent misrepresentation requires a false representation — mere transmission of accurate, unaltered third-party data is not a false representation |
| Whether InComm pleaded a duty to detect mismatches (merchant identity or auth keys) that would make Global’s transmission actionable | InComm: Global knew or should have known the reversal transactions were invalid based on merchant/auth-key discrepancies | Global: No common-law, statutory, or contractual duty alleged requiring Global to compare or flag discrepancies; it made no representations about legitimacy | Held: No duty was pleaded; absent an alleged duty to detect or an affirmative representation of accuracy, claim fails |
Key Cases Cited
- Robert & Co. Assoc. v. Rhodes-Haverty Partnership, 250 Ga. 680 (recognition of negligent misrepresentation under Restatement §552)
- Smiley v. S & J Investments, 260 Ga. App. 493 (transmitting a third party’s report without representing its accuracy does not support negligent misrepresentation)
- Badische Corp. v. Caylor, 257 Ga. 131 (elements and scope of duty under §552 framework)
- BDO Seidman, LLP v. Mindis Acquisition Corp., 276 Ga. 311 (Georgia courts’ continued application of Robert standard)
- Financial Security Assurance v. Stephens, Inc., 500 F.3d 1276 (11th Cir.) (under Georgia law, negligent-misrepresentation and fraud claims require false representations and justifiable reliance)
- Anderson v. Flake, 267 Ga. 498 (motion to dismiss standard — pleadings construed favorably to plaintiff)
- Northway v. Allen, 291 Ga. 227 (de novo review of dismissal for failure to state a claim)
- Levine v. SunTrust Robinson Humphrey, 321 Ga. App. 268 (distinguishes cases where defendant incorporated others’ data but also represented its truth, creating fact issues)