[Vision2020] Credit Card Processing Cautionary Story

[Robert Dickow]

I thought there was a consumer protection law that let you get out of
contracts like that within a certain period of time.

Bob Dickow, troublemaker

-----Original Message-----
From: vision2020-bounces at moscow.com [mailto:vision2020-bounces at moscow.com]
On Behalf Of Austin Storm
Sent: Tuesday, March 29, 2011 3:15 PM
To: vision2020 at moscow.com
Subject: [Vision2020] Credit Card Processing Cautionary Story

It's been awhile since I've been on Vision 20/20. I wanted to rejoin
so that I could warn other local small business owners about a scam I
was recently taken in by.

A salesman named Brian Jacob with Eliot Management Group out of
Spokane came to my business selling merchant processing. He was
personable and didn't have an aggressive selling style. But more
importantly, he was able to speak capably about credit card processing
rates, so I asked him to give me a quote. It was competitive, so I
decided to switch. I would rather use a (relatively) local processor
than a big bank.

It was only when he came back with the processing agreement that
things started to go awry. I hadn't talked about terminal purchasing,
and when I brought it up he said their preferred terminal cost $800
new, but was available for a $48 per month lease. He assured me he'd
be happy to resell my lease (to the next person on a waiting list) if
I ever wanted to get out of it, and suddenly became aggressive and
rushed me through a one-page lease.

It was only a few days later that I went back to the lease and got
that sinking feeling in my chest. The terminal he had leased me was
selling for $200 new retail online, and I had signed a 4 year lease
for it. It will end up costing $2,300 over the life of the lease for a
$200 machine. Later research showed that this is a fairly common
practice, and that the representative might make as much as 50%
commission for selling the machine lease.

Since then, I've been unable to reach the sales rep or anyone at the
company on the phone or by email.

As much as it pains me to tell the story, I wanted to warn other
business so that they could learn from my experience. Even if a
processor is offering competitive rates, watch out for long-term
contracts and equipment leases.

Also, I've decided to set up a Google Group for local small business
owners and other interested folks. This isn't the first hard lesson
I've had to learn in starting my business, and I'd love to have to
place to share experiences with other people (some of the things might
be of interest to this group, but a lot of them wouldn't be). The Buy
Local and Moscow Chamber meetings have been vital, but I am still too
busy with the business to make it to as many as I'd like. If you know
anyone who'd be interest in this, please pass it along. The group is
unmoderated and all are welcome:

http://groups.google.com/group/palousebusiness

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