[Vision2020] Credit Card Processing Cautionary Story

Art Deco deco at moscow.com
Tue Mar 29 16:18:25 PDT 2011


If fraud either by misrepresentation or failure to reveal significant, material facts occurred, the contract may be voidable, regardless of any language in it.

Here's a note of caution:  if anyone (business or otherwise) will not allow you to have a copy of the blank contract before signing for enough time for you to read and absorb it, do not sign the contract.  Always ask for a copy of the blank contract overnight in order to study it.

w.
  ----- Original Message ----- 
  From: Austin Storm 
  To: vision2020 at moscow.com 
  Sent: Tuesday, March 29, 2011 3:14 PM
  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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