Customer Fights First Data Over Teaser Rates!

This is just in the news today! A small business owner was being taken advantage by First Data processing. The story explains that Rohan Shetty owns a small hot dog stand in Sussex County, NJ.As a small business owner she can't afford to be paying lots of money in merchant service fees.She figures out that the rates she was told were not the rates she was getting! Unfortunately this is a common practice for a credit card processor to offer teaser rates and then hike them up very quickly. They usually try to lock you into a contract so you are stuck paying those high fees for years. This is why if nothing else always avoid a contract. Few companies advertise no contracts but some merchant service providers will offer it.

Debit Card Scam from Processors

(Via Bloomberg) The Federal Trade Commission said Friday that it is paying some $350,000 in refunds to 100 small U.S. merchants that were defrauded in a debit and credit card scheme. The scheme involved several firms that falsely promised they would save small businesses money in credit and debit card processing fees by offering lower rates that those of other card processing services. However, the firms failed to disclose fees and concealed pages of fine print until after the merchants had signed contracts for their services, the FTC said.

The FTC identified the firms that perpetrated the scheme as Merchant Processing Inc., Direct Merchant Processing Inc., Vequity Financial Group Inc. and PPI Services Inc. Also involved in the scam were Aaron Lee Rian and Karely McCarthy, also known as Karly Speelman, the FTC said. The agency reached settlements with Rian and McCarthy that banned them from marketing card processing goods or services for sale or lease. Certain of their assets were sold to provide funds for the refunds, the FTC said.Merchants due to receive refunds were to get between $100 and more than $25,000, depending on how much the merchant paid, the FTC said.