Transit Employees Federal Credit Union, a $101 million-asset institution based in Greenbelt, Md., has filed a lawsuit against PSCU Inc., a Florida-based credit union service organization, claiming the CUSO provided sub-standard and slow call center services.
Filed in the Circuit Court of Sixth Judicial Circuit in Pinellas County, Florida, the suit seeks damages of at least $15,000.
Representatives from Transit Employees FCU did not respond to Credit Union Journal’s request for comment. Merry Pateuk, PSCU’s vice president of communications, told CU Journal via email that the CUSO’s “long-standing policy is not to comment on pending litigation.”
TEFCU, which brought this action under Florida’s Unfair and Deceptive Trade Practices Act, says it first contacted PSCU in January 2017 about its call center services, which would involve PSCU employees answering questions from TEFCU members.
The suit alleges that in late February 2017, Francine Fern, a vice president at PSCU, personally met with Rita Smith, TEFCU’s CEO, to discuss the value of PSCU’s call center services. Smith subsequently informed PSCU that TEFCU would be able to budget between $10,000 and $12,000 per month to pay for call center services, but no more.
PSCU is said to have proposed a plan under which its services would be billed on a per-minute basis, based on how much time its employees spend on the phone with TEFCU members. Fern later indicated that with its other credit union clients, PSCU call center workers spent an average of 2.5 minutes per member who called.
Based on these figures, TEFCU entered into a call center service contract with PSCU in late March 2017, with PSCU beginning service in late May.
According to court documents, TEFCU immediately had problems with the service, including PSCU employees providing inaccurate information to TEFCU members and hold times that ran as long as 50 minutes, among other complaints.
After complaints were lodged, PSCU vowed to fix the problems but then allegedly failed to send TEFCU timely billing invoices.
In mid-July 2017, when PSCU finally sent TEFCU a bill, the amount was in excess of $71,000 and did not clearly explain how the charges were calculated.
The court filing says during a conference call that month, PSCU informed TEFCU that the average call between credit union members and PSCU workers was not the 2.5 minutes, but rather five minutes.
Following that conference call and at the credit union’s request, TEFCU was allowed to listen to several calls handled by PSCU’s employees. The suit alleges that it “became immediately apparent that PSCU’s employees routinely left TEFCU’s members on hold for lengthy periods of time, well over five minutes, all of which was billed to TEFCU by the minute.”
TEFCU then took steps to reduce the length of the calls being handled by PSCU and to fix the deficiencies in PSCU’S services by creating “customized” scripts and escalation requirements designed to limit the credit union’s use of PSCU’s service.
In early August, TEFCU warned the CUSO that if these issues were not solved, the credit union would terminate the service agreement. According to the credit union, PSCU “failed and refused to cure its performance deficiencies.”
Moreover, after TEFCU advised PSCU that all calls exceeding two minutes must be escalated and sent to TEFCU for rapid and correct resolution. The plaintiff alleges PSCU ignored this directive.
TEFCU complains in the lawsuit that PSCU’S “subpar call center performance and outrageously long hold times caused a boutique credit union like TEFCU significant reputational harm.”
Demands for arbitration, jury trial
In late August, after a “lengthy phone discussion,” both parties agreed to terminate the contract, with an established de-activation date of September 30, 2017.
Trouble arose again when TEFCU determined that PSCU staffers were spending too much time on the phone with the credit union’s members, leading TEFCU to assert that it should not have to pay for calls in which members were left on hold for extended time periods.
In mid-September 2017, TEFCU agreed to pay $7,500 for the installation costs of the system, plus 50 percent of the amounts billed by PSCU for its services from May 20, 2017 through August 30, 2017, plus the full amount of PSCU’s September 2017 invoice, which had not yet been submitted.
When the credit union received that invoice in early October, it showed calls with TEFCU members exceeding 10 minutes and in some cases as long as more than half an hour. TEFCU alleges PSCU refused to provide details and determined that the CUSO’s sales team had engaged in “deceptive sales tactics as well as deceptive trade practices” in an effort to secure the contract with TEFCU and force payment for hold times outside of TEFCU’S control.
In August 2017, PSCU filed a Demand for Arbitration, under which it seeks $141,174.33, along with liquidated damages for “improper early termination,” interest, attorneys’ fees and costs.
TEFCU now demands a jury trial.
