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Parents Criticize School Payment Firm Squid Over Withdrawal Fees
A payments company, Squid, previously utilized by parents for school dinner payments, is facing backlash for imposing a £10 charge on withdrawals of remaining balances. This fee was implemented after the company exited the market, leaving numerous parent accounts affected and sparking concerns over the fairness of the charges.
Squid’s Market Exit and Fee Controversy
Squid, a service employed by approximately 600 schools across the UK for processing school payments, ceased operations earlier this month. The announcement of its closure and subsequent account terminations was initially made in February. Customers have voiced their discontent through complaints to Guardian Money and online forums regarding the levied withdrawal fee.
Company Defends Charges
Squid has defended its policy, asserting that the withdrawal charges are consistent with its established terms and conditions. However, the company has declined to disclose the total sum of money remaining in customer accounts or the revenue generated from these £10 fees.
Service Closure and Customer Impact
The company offered online accounts facilitating payments for school meals and excursions. Citing unfavorable economic conditions as rendering this segment of their business unsustainable, Squid declared its withdrawal from the market last month. Their services catered to an estimated 180,000 to 200,000 pupils in primary and secondary education.
Terms and Conditions Stipulate Withdrawal Fee
Squid’s terms and conditions outline that users can only withdraw funds from their accounts if the balance is £10 or greater. Furthermore, an “administration fee” of £10 per user is applied “for refunding stored value from your Squid accounts.” This condition has become a focal point of customer grievances.
Customer Concerns and Online Reactions
One affected customer who contacted Guardian Money highlighted the disproportionate impact of these charges on individuals facing financial hardship. Another questioned the legitimacy of applying these terms and conditions post-service termination. The fairness and justification of these fees have also been heavily debated by users on the Mumsnet forum.
CEO’s Justification
Adam Smith, founder and CEO of Squid, addressed the criticism by stating, “We operate a business and incur costs. Our departure from the market is due to financial unsustainability. We are executing a structured and organized exit.”
He further asserted, “We have established terms and conditions, and we are entirely within our rights to enforce these terms.”
Account Balances and Future Operations
Smith indicated that the “vast majority” of accounts had been depleted to zero balances by users. However, he could not provide an exact figure for the total funds still held within Squid accounts. He confirmed that any unclaimed funds would remain accessible until requested by account holders. Squid continues to operate, providing payment solutions to humanitarian organizations in Africa.