A Brentwood-based leader among providers of credit dispute resolution technology has filed a complaint with a global trade association against Provana.
The complaint — which alleges misconduct by the Chicago-based American division of Provana, an industry giant based in India — is filed with ACA International: The Association of Credit and Collection Professionals, a nonprofit industry watchdog. Both Palinode and Provana are members of ACA International; as are some 2,100 other organizations in the credit, collection and receivables management sectors.
Palinode’s filing with ACA International comes just three months into the lawsuit it levied against Provana for allegedly misappropriating trade secrets. The same suit also names one of Palinode’s own clients, Plaza Services, claiming Plaza improperly lent its customer-level access of Sonnet, Palinode’s proprietary software, for Provana to use for free as a means of speeding up the development of its own credit dispute resolution software to compete directly against Palinode.
The new complaint with ACA International requests that the regulatory body investigate Provana’s conduct and, if deemed fit, take appropriate disciplinary action. Palinode’s request also comes with the suggestion that Provana be expelled from its ACA International membership.
Palinode alleges that Provana violated four rules from ACA International’s Code of Conduct. One pertains to members’ relationships with each other, another concerns members’ business relationships, a third deals with supporting the collective membership of the association and the last espouses members’ participation in the industry as a whole.
“While Palinode understands that ACA International misconduct complaints are rare, we believe that Provana’s actions warrant complaint and that ACA International should immediately conduct an investigation,” said Joe Storey, Palinode co-founder and CEO. “Provana hasn’t taken any responsibility for its actions — in unlawfully accessing our Sonnet platform to help fast-track the development of its competing IPACS product — and instead continues to market IPACS to Palinode’s customers.”
The ongoing suit seeks damages for Palinode and a permanent injunction.
Relatedly, the ACA International complaint also comes as Provana and Plaza Services have indicated that they will not be united in their legal defenses against Palinode’s charges. Plaza has filed a cross-claim for indemnity against Provana, and Provana has filed a counterclaim.
Plaza’s cross-claim denies any collusion on or complicity with Provana’s allegedly illicit activities. They add that Provana alone is responsible for any damages awarded to Palinode, including those for which Plaza is determined to be liable because Plaza claims to have been unwittingly used by Provana.
Provana has met this with a counterclaim against Plaza, which asserts that Plaza breached a Plaza-Provana agreement by misappropriating Palinode’s trade secrets just as Palinode’s suit describes. Provana also argues that the court should consider damages it has already suffered such as business interruption, reputational damage and legal costs.
“Palinode’s lawsuit against Provana and Plaza is still before the courts, but that shouldn’t stop ACA International from processing and addressing Palinode’s misconduct complaint without delay,” Storey said. “We have faith in the court system and ACA International to arrive at a just conclusion to Provana’s wrongdoing.”