The Tyro Payments Ltd (ASX: TYR) share price has come under pressure on Wednesday afternoon.
At the time of writing, the payments company's shares are down 3.5% to $3.90.
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Why is the Tyro share price dropping?
Investors have been selling down the Tyro share price following the release of an announcement just before lunch.
According to the release, Tyro has confirmed that proceedings have been filed in the Federal Court of Australia in relation to a representative proceeding.
That proceeding alleges, among other things, misleading and deceptive conduct by the company. Tyro, which has yet to be served the documents, understands that these proceedings relate to the terminal connectivity incident in January.
Remediation
The company highlights that, as previously advised, it has established a remediation program to provide financially impacted merchants a fast and straightforward channel to seek to claim financial loss caused by the connectivity incident. This process continues to be available to any financially impacted merchant that has not as yet sought remediation.
There are two options for impacted merchants. One is the Accelerated Path Assessment, which provides a simple remediation solution via a merchant service fee rebate over a designated period. This rebate is designed to offset the financial loss suffered.
The other is a Case Managed Path Assessment, which provides a more tailored remediation solution. Under this option an impacted merchant provides specified claim information about their particular circumstances and loss claimed to have been suffered.
Tyro notes that as of the date of this announcement, 92% of merchants who selected one of the above assessment options have had their claims settled. The company also continues to actively work with the remaining merchants to resolve their claims.
Tyro advised that it intends to defend the class action and has retained law firm King & Wood Mallesons.
