5 THINGS YOU MUST KNOW ABOUT MERCHANT ACCOUNT FRAUD

Number 1 - Merchant Account Fraud Exists

Merchant accounts are no exceptions to fraudulent activities. When speaking of merchant account fraud, one need not necessarily refer to the merchant account providers who bait-and-switch or the occasional “merchant account providers” who wait for you to make your initial payments and then totally disappear with your money without any service rendered. There are more basic acts of merchant account fraud committed on a daily basis which has serious negative effects on a larger number of innocent merchants.  

Misleading offers, credit card processing hardware as well as software scams, hidden fees and bad customer service and technical support do fall under merchant account fraud. This is because merchants end up signing up and paying for merchant accounts after being made to think that they’ve got a good deal for money and they’ve been told the whole truth about the terms and conditions. To have misled the merchants to think so by either withdrawing truthful information or giving deceptive assurance is absolutely deceitful.

Number 2 – Know All The Fees And Charges

To prevent being caught in an unfortunate situation where you are swamped by unforeseen fees, get to know all the fees and charges by reading the agreement carefully. Some providers do not charge an outright start up fee but it could have been hidden as bank setup fees or software licensing fees.

Merchants have also found themselves slammed with high termination fees when trying to switch to a different merchant account provider – a fee that they were previously unaware of. Do not be one of them. Be a pain and ask loads of questions if you must in order to understand exactly what you are signing up and paying for. 

Number 3 – Read And Understand The Terms & Conditions

Taking time to read your agreement conscientiously is CRUCIAL. You know there’s something wrong if the sales representative is unwilling to give you the time you need (even if it is a day or two) to read through the documents. This is your right as a client. Do not give it up and be pressurized into making immediate decisions even if they promise to give you a great offer which is only valid for the moment or the day.

The lengthy, confusing terms and conditions is merely the strategy used by many to hide information that may prove to be very disadvantageous to you. Besides fees, other conditions may also be hidden in the agreement. For example, you may not be aware of the fact that the software or hardware you spend so much to purchase may not be compatible with other merchant account providers.

In that case, even if you have problems with the current provider, you cannot switch to another provider unless you are willing to spend much money all over again on purchasing new software or hardware. Such information is often found in the agreement and you are not told upfront.

Number 4 – More Issues

• You might also face a whole lot of other problems such as bad customer service or technical support.
• Your merchant account provider may not process the chargeback in an opportune manner which means you may lose the chance to contest the chargeback.
• Even if your merchant account provider is a reputable bank, you might be charged higher or can face problems as most of these banks outsource such services.
• And there are many more....

Number 5 – There Is Hope

Merchants are usually encouraged to send in all their complaints about their merchant account providers to Better Business Bureau. Hence, once you have narrowed down to a few merchant account providers you are interested in, go to Better Business Bureau and check on them.

Take a look at the complaints and if they have been dealt with well by the merchant account providers.

You can also go to Google Groups and do a search on the merchant account provider by keying in the company name together with other keywords such as scam, fraud or complaints.

Obtain referrals and reviews of the merchant account provider from current or ex-clients. Read up on their customer service and technical support. It is wiser to learn from others’ experiences than to find ourselves caught in any scams.