Merchant Services Scams

The sneaky part? It’s not a call from your current merchant services company, and the company has no idea about your current rates and fees.

• The Merchant Services Sales Call
  • Version 1
  • Version 2
• What Happens
• What To Do
• Lawsuits
• Checking Your Pricing

The Merchant Services Sales Call

There are different versions of the sales call stating that your merchant account rates have increased. The caller attempts to get you to contact the company, while not identifying themselves by name in effort to preserve the illusion that they’re associated with your current merchant services company. They typically don’t know who your current company is, so they don’t outright pretend to be that company. Additionally, they can say they never claimed to be a specific company if they don’t give you that name upfront. These calls are often voicemails left after hours or through bypassing the phone system to go directly to voicemail.

Version 1

In this call, the company states that you may have noticed an increase in costs, and unless you contact them, you’re agreeing to those increases. The call we received at CardFellow went as follows:

This message is an important notification regarding your merchant account. You may have recently noticed an increase in monthly service fees on your monthly processing statement.

Without a response from you, the assumption will be made that you accept the increased costs. Please note you do have the option of calling your merchant service partner’s office to counteract the increase. However, this is done on request only and must be done in a timely manner. Merchant account executives can be reached directly by calling [number.] Failure to respond will result in continuation of increased costs.

Version 2

In this one, the company indicates that you’re being notified of fee increases because you haven’t conducted a rate review. The call we received went as follows:

This is a notification of fee increases on the merchant account and a response is required from you in a timely manner. Records indicate you may not have completed an annual rate review. Please note you have the option of calling dedicated merchant account executives at our merchant services partners office Monday through Friday from 8am – 5pm central standard time at [number] so they can assist you with a review to counteract and overcome the increased costs. Reviews are by request only and we’re not obligated to repeat this reminder.

These calls are designed to scare you into contacting the company. After all, who wants to agree to a cost increase? However, this isn’t actually your merchant services company calling. Note that the caller doesn’t identify their company. They don’t know who your current merchant services provider actually is, and will go to great lengths to avoid telling you their company name, even when asked directly, because they know that will tip you off.

Furthermore, they position these calls as a “reminder” or a courtesy, trying to make you think it’s in your best interest to reply and take care of it.

What Happens

If you do call them back or if a real person calls instead of a recording, the rep may say they are “your processor” or “your merchant services provider.” The company will try to get you to agree to switch processors, but they might not be so forthcoming. They may tell you that you need to sign new paperwork to “keep” your pricing the same or that you have to send in an updated application to continue your existing service.

Related Article: EMV Small Business Scams.

What To Do

You might find that merchant services keeps calling, trying different tactics to get you to call them back, send statements, or switch processors. Don’t sign new contracts or send in paperwork without reading it carefully and confirming what it is with your current processor. Some clients have come to CardFellow after switching processors without even realizing it.

It’s best not to take these type of sales calls in the first place, but if you do, push for them to tell you their company name. Don’t assume that if they say “your processor” that they are actually your processor – make them tell you the processor name. You can also hang up and contact your processor directly to ensure who you’re speaking with is actually your processing company.

If you receive a voicemail recording like the ones we got at CardFellow, don’t call the company back. Instead, if you’re concerned, contact your processor directly. Tell them about the call and ask if a company representative called.

If you’re a current CardFellow client who has received one of these calls and you’d like advice or a rate review, please contact us for assistance.

Lawsuits

In late December 2017, an Atlanta law firm filed a class action suit again payment processor Merchant’s Choice Payment Solutions. The law firm alleges the type of deceptive sales calls and practices described in this article. Specifically, the lawsuit claims that Merchant’s Choice trained sales representatives to cold call businesses and imply they’re affiliated with that business’ current credit card processing company, then telling the business that they need to update equipment or reapply to avoid increases in fees. Merchant’s Choice then sends paperwork to the business, and that paperwork is actually a new contract, resulting in business owners unknowingly entering new contracts. The lawsuit also alleges that the processor doesn’t adhere to stated processing fees referenced in marketing materials and contracts.

The lawsuit, Al’s Pals Pet Care, LLC, et al. v. Woodforest National Bank, N.A., et al., is pending in the United States District Court for the Southern District of Texas.

Checking Your Pricing

The success of these calls and deceptive tactics comes from the fact that many businesses are overpaying for processing. Instead of listening to a sales rep that will say almost anything to get your business, use an independent comparison system to find the right solution.

The easiest way to find out if you’re paying too much is to use a quote comparison tool. CardFellow’s quote comparison lets you view pricing from multiple processors privately, with no sales calls, no hidden fees, and no deceptive tactics. Here’s how it works:

We’ll even do a cost comparison for you. That will show the difference between your current quotes and CardFellow marketplace quotes. If you already have good pricing and it doesn’t make sense to switch, we’ll tell you that, too!  Give it a try.