Fraud Alert: Credit Card/Debit Processing
Many of you have contacted CFIB to complain of high-pressure tactics being used by companies offering credit and debit card processing. Here are examples of the telephone scripts they have used:
- "Hi, we are a company working for the banks to see that you receive your 30% discount on your credit card fees…."
- "Hi, we are working on behalf of the banks/CFIB/Chase Paymentech/VISA/MasterCard to lower your merchant services costs. If you send us your credit card statement right away, we will have our team of analysts find you savings."
There are many variations on this theme, but typically they promise to reduce your POS and other transaction rates considerably.
The callers pressure you to act rapidly and to send paperwork immediately. If you do not, they call again and again demanding that you send the paperwork right now. These unprofessional sales techniques are highly suspicious.
PLEASE BE CAREFUL! While there are several legitimate large and small companies such as Chase Paymentech, Moneris and Global Payments etc. providing credit and debit card processing, there are others who do not follow fair or transparent business practices. Some companies mislead customers by indicating they are non-profit or government agencies trying to assist small or medium-sized businesses. Some members end up signing a contract that feature hidden fees that make the initial low rate much higher when all the monthly charges are tallied.
Most worrisome are members that have signed contracts only to find that their credit card/debit (POS) machines do not work and customer service is severely lacking. Sometimes money is not deposited in their accounts and no one returns their call. In other cases businesses have quit in frustration only to have exit penalties applied and collection agencies calling. One company reported being charged $60,000 for leaving a contract early due to a malfunctioning system that could not be serviced. He is still being hounded for payment. While there are legitimate merchant services companies, any unknown caller using pressure tactics and demanding a financial statement should raise concern. Only deal with those you know and trust. You may also want to ask for references of satisfied customers.
At present CFIB is pressing for resolution to this bad behavior by working with credit card and processing companies to shut down abuse. On a broader scale, CFIB has been leading a year-long campaign to protect merchants’ rights with respect to credit/debit cards recommending a code of conduct which the Honorable Jim Flaherty announced in the recent federal budget. We anticipate the code will do much to curtail the abuse we describe in this message. If you have a similar complaint and would like to assist in this investigation, please contact your CFIB Business Counsellor to provide details.
They can be reached at 1-888-234-2232 (English) or 1-888-323-4336 (French).
