Global Payments, Inc. v. Incomm Financial Services, Inc

InComm issues prepaid Vanilla VISA debit and credit cards. Thieves bought the cards, used them to buy goods, and then used different merchants to create fake refund requests. Global Payments, a company that processes card transaction data for merchants, forwarded that fake refund data through the VISA network to InComm, which paid out more than $1.5 million in credits that the thieves pocketed. InComm sued Global for negligent misrepresentation, arguing Global should have caught mismatches showing the refunds were fake. The trial court dismissed the claim, but the Court of Appeals of Georgia reversed. The Supreme Court of Georgia took up the case to decide whether merely transmitting someone else's data, without vouching for it, can support a negligent misrepresentation claim. The court held it cannot, because InComm never alleged Global claimed the data was accurate or legitimate, so the Court of Appeals was wrong to revive the claim.

A party who merely transmits information created by someone else, without representing that the information is accurate or legitimate, cannot be held liable for negligent misrepresentation, even if the transmitted data later proves false; because InComm never alleged Global vouched for the reversal data's accuracy, its claim failed as a matter of law.

The ruling shields payment processors and similar data intermediaries from negligence lawsuits when they simply relay information generated by others without vouching for its accuracy, affecting how banks, card issuers, and merchants allocate fraud losses in Georgia.

Reversed

1. The court applied Georgia's negligent misrepresentation standard from Robert & Co. Assoc. v. Rhodes-Haverty Partnership, which requires that a defendant who supplies information owes a duty of care only to those it manifestly knew would rely on that information for an intended purpose.
2. Under that standard, liability attaches only when the defendant makes a false representation that the plaintiff relies on; simply passing along someone else's data without endorsing its accuracy is not a false representation.
3. Applying this rule to the facts, the court found InComm's complaint showed Global transmitted the reversal transaction data exactly as received from the merchants, without altering it or claiming it was legitimate.
4. Because InComm never alleged Global had a duty to compare authorization keys or detect mismatches revealing the refunds were fake, and never alleged Global represented the transactions as valid, InComm could not show Global made any false representation.
5. The court concluded that without an alleged false representation or a duty to verify the data's legitimacy, InComm's negligent misrepresentation claim against Global failed to state a claim under Georgia law.

• negligent misrepresentation
• payment processing fraud
• Vanilla VISA cards
• motion to dismiss standard