The K Wearables prepaid Mastercard programme was migrated from a prior e-money issuer to Moorwand Ltd in April 2020. Our previous issuer did a fantastic job of launching our programme, but we felt we needed a partner that could better support our expansion plans for Europe.
We produced a written document stating clear requirements for a new issuer and this was shared with a number of potential partners including Moorwand. Moorwand stated in meetings and email that they could meet those requirements – backed up by public statements to the industry. We now know these representations were false.
Escalation of Dispute
While the misrepresentations did not materialise for 5x months, we noticed some issues within a few weeks of the migration. Our problem was that that having migrated, Moorwand as e-money issuer for our programme was able to exert excessive control. Despite K Wearables being Moorwand’s client and paying them fees, Moorwand (as e-money issuer) has ultimate control over our programme.
We raised numerous complaints and escalated these – typically an e-money issuer should follow best practice around complaints, escalation etc. but that didn’t happen with Moorwand.
With the lack of resolution, K Wearables sought financial compensation from Moorwand for our losses. Guess what happened ….
Why didn’t you move to another provider?
Unfortunately, it’s not that simple. Unlike a rented office where you might choose to move due to poor service, absorb the costs and consider future action – we cannot do that. We need permission from the outgoing issuer (i.e. Moorwand ..the one we had the dispute with) to approve and support our transfer to a new provider.
Can you start to see what the problem might be?
Moorwand terminated the K Wearables prepaid programme in July 2022. The justification used by Moorwand is untrue and is designed to the muddy the water – leveraging their role as e-money issuer.
The reality is that Moorwand lack the experience at both operational level and C-level.
Why did Moorwand attempt to shut
K Wearables down?
In our opinion it seems clear that Moorwand’s strategy was to get as much money from us as possible and then shut the programme down. But their strategy was to shut the business down as well – in an attempt to limit the potential of a legal claim against Moorwand and compensation.
Moorwand issued a winding up petition prior to the notice to terminate the programme. The reason for using a winding up petition was to limit access to our funds – banks are required to prevent a company from accessing funds in their bank account on the issuance of a winding up petition.
No assessment of whether the petition is valid. So a good way prevent a business from fighting a legal battle / bringing a claim ..if you cut off their funding right?
Even the way in which Moorwand did this was highly questionable – by their own admissions (in court) they didn’t follow the correct process …but they don’t care as they got their result.
High Court & Judgement
Moorwand likely expected that their winding up petition would go through unchallenged …its typical of these sort of cases.
Unfortunately, we decided to fight the petition by various meanings, and ultimately got a hearing.
Moorwand had their own in-house legal counsel, a solicitor and 2x barristers.
K Wearables was represented by Philip Campbell (Founder) as a litigant in person i.e. without legal training. We had no choice …as Moorwand had cut off our funding.
On 27th February 2023, the High Court ruled in favour of K Wearables Ltd, stating:
…the company [K Wearables] has succeeded in establishing a genuine and serious claim based upon its claim of fraudulent misrepresentation [by Moorwand
Judge Raquel Agnello KC denied Moorwand Ltd’s permission to appeal and awarded trial costs to K Wearables Ltd.
The full judgement is available via the National Archives: https://caselaw.nationalarchives.gov.uk/ewhc/ch/2023/410
As of the date of writing, Moorwand has not paid K Wearables the costs awarded
We have engaged specialist lawyers to help K Wearables with the case against Moorwand and the Directors involved. It would be inappropriate to say much more at this point.