Credit Card Processing, Scams and Fraud

Merchant Services Scams

by

October 30, 2018

Merchant services sales reps use a variety of tactics to try to win your business, but some of those tactics are more deceptive than others. One example is a pre-recorded sales call that claims your pricing has increased and states that if you don’t contact the company, it indicates you agree to the price increase.

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

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. These calls are often voicemails left after hours or through bypassing the phone system to go direct to voicemail. Below you can listen to two of the calls we’ve received here at CardFellow.

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. We’ve transcribed the audio as well.

Listen here.

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

Here’s the second call. In this one, the company indicates that you’re being notified of fee increases because you haven’t conducted a rate review. We’ve transcribed the audio, below.

Listen here.

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 (800) 247-1353 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.

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 one 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.

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Ellen Cunningham

BY Ellen Cunningham

Ellen has a degree in English, which she puts to work every day researching and writing articles, processor reviews, and social media posts. She enjoys the challenge of explaining complex topics - making her a perfect fit for credit card processing - and strongly believes in CardFellow's mission of empowering business owners through education.When she's not busy following the latest industry news, Ellen can be found cycling the beautiful trails of southern New England, narrowly losing at pub quizzes, or practicing her trapeze skills in aerial circus class.

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8 COMMENTS

  1. from Leinani, on September 19, 2018

    I google searched “independent merchant services scams” and discovered this site. My unfortunate situation costed me over $11,700. Alpha Marketing Group LLC based in Arizona, solicited me via phone regarding an at home business opportunity to be an independent merchant marketer. They build a website for you advertising to prospects, telling small businesses that they’ll save money if they contact the number given on the web site. What these unethical scammers do is that they portray you make money from credit card processing fees and from the leasing of credit card processing devices.
    Effective Design Solutions, IBC Strategies, and IWDCC are other unethical businesses involved as well. They contact you right after and push you to purchase “advertising packages” and “leads” packages. I was so eager to make supplemental income, that I didn’t truly realize that this whole thing was a scam until it was too late.
    Beware of these crooks. I filed complaints with the Arizona BBB, Arizona Attorney General, the FTC.

  2. from al, on August 23, 2018

    We get these calls nearly every day. We are a small independent hotel. They ask if “(owner’s name) is available” (he never is), I tell them no and I can take a message. They get aggressive and say they have left many messages and have not heard back (take a hint then!). They don’t mention what company they’re with. My boss told me these are just sales calls/scammers. Now I will just tell them to stop calling and hang up.

  3. from Gabriela Griffin, on March 26, 2018

    I am sick and tired answering these calls. I have a small shop and they are costing me money by halting my work answering these calls I keep telling them to take me off their list. I will not take credit cards. Why should I pay to get my money?

  4. from Katie, on March 1, 2018

    I’ve received two phone calls from them in a month. They can’t tell me who my credit card is with. The person each time has a very thick foreign accent. I’ve told them both times to stop calling me and this last one the guy got irate with me and said “You don’t want to lower your interest rate?”. I YELLED NO! He said that is stupid. I hung up on him.

  5. from Paula, on January 4, 2018

    I received a call but it was a live person. When I asked for their phone number they hung up.

    They stated “we are YOUR merchant provider.”

  6. from Anonymous, on November 14, 2017

    Got this voicemail today…

    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 know you have the option of calling dedicated merchant account executives at our merchant services partners office Monday through Friday from 8 a.m.. To 5 p.m. central standard time at 800-***-**** so they can assist you with your review to counteract and overcome the increased cost. Reviews are by request only, we are not obligated to repeat this reminder again, please call 800-***-****. Thank you.

    • from Ellen, on November 16, 2017

      Yup, sounds like one of the ones we received. It’s always a good idea to keep up your guard with these calls!

  7. from Laura Ray, on October 31, 2017

    I’ve received more than one phone call from this phone number stating the exact same thing. I do not have credit card machines. As you mentioned, when they call my business and leave a phone number, they do not provide the name of their company, nor do they when I call back to let them know I don’t appreciate scams.