Department defends decision to award PFS High Street Scheme contract
The Department for the Economy has defended hiring a firm for the High Street Scheme that was fined for its part in a ”prepaid card cartel’. Prepaid Financial Services has been given the contract to deliver the £145million scheme, but in recent months it is reported that the company has been involved in issues involving their handling of a prepaid card scheme for asylum seekers in the UK, an investigation by the Central Bank of Ireland and being one of five companies who provisionally agreed to pay fines in the UK for their involvement in an alleged ‘prepaid card cartel’.
PFS along with Allpay and Mastercard, agreed to pay fines of more that £32million in total for their alleged anti-competitive behaviour. PFS was fined £1 million for its part in the scheme.
Chris Hemsley, Managing Director of the Payment Systems Regulator, said “Pre-paid card services, like these, can provide significant benefits to local authorities as one way to make welfare payments to some of the most vulnerable people in society.
“By colluding in this way, we consider the parties were acting as a cartel. Because of the reduced competition local authorities may have been missing out on an alternative supplier or products that were either cheaper or better suited to both their needs and the needs of those using the pre-paid cards.
However the Department for the Economy has defended its decision to award the contract to PFS. The Department said that it was aware of these issues with PFS prior to the awarding of its contract for the High Street Voucher scheme, and does not believe it will affect the rollout.
A Department spokesperson said: “The Department for the Economy is aware of the issues and does not believe these will have any impact on the rollout of the High Street Scheme. The Department’s contract for the supply of a prepaid card is with PFS (UK) which has no involvement in the Central Bank of Ireland investigation. PFS(UK ) is regulated separately by the Financial Conduct Authority in the United Kingdom.
“The contract for the pre-paid cards was awarded after a secondary competition using a government wide contracting framework in which four pre-qualified companies on the framework were invited to submit bids. Two companies submitted completed tender documentation. This process was carried out in accordance with the relevant procurement procedures and best practice.”
*Full interview with Economy Minister Gordon Lyons on the High Street Scheme coming in next issue of NR*