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It happened again.  I had to tell someone that they signed a contract that they never should have signed.

Warning!  Read the Fine Print!

Warning! Read the Fine Print on a Contract!

I had a client who was using a Phone Swipe.  She had not business getting a regular processing account.  Her tickets were less than $20 on average and her volume wouldn’t even hit a few hundred in a month per her estimations.   She had some issues because her Tax ID didn’t match the name she entered (which is why you make sure they always match) and she  didn’t let me know.  (This is an issue she would have with any company if she didn’t have the information correct.)

A rep from a local competitor walked through her door and signed her up for regular account.  Remember, she didn’t have nearly enough sales to justify a regular account.   My heart sank – not because she wasn’t using me, but because I knew she had no idea what she signed.  She said she could get out of it at any time and that he was local.  He wouldn’t mislead her.  (This was especially important because she was planning on selling or closing her business by year’s end.)

I asked if she had her contract.  She did.  She repeated that she made sure she could get out of it at any time.  She asked.  She told him she wouldn’t have the business next year.  She is only paying $2 a month for the use of the machine.

“Did you ask what the Early Termination Fee was?”

“No.  He said I could get out of it.”

Upon review, I showed her where she was now obligated to pay $495 when she closed her account.  It was not on any of  the pages she signed.  It was in the booklet of the contract 2 pages behind.   They didn’t even call it an Early Termination Fee.  But there is was, 3 years or $495.  She had only read the pages she signed.  By the way, she is also going to be hit with a $25 minimum fee every month and probably PCI fees.  (The contract was very vague on this point.)

“But he said I could get out of it any time!”

“You can.  He just didn’t tell you it will cost you $500 to do it.  Did he tell you that you will have to pay a minimum of $25 a month?”

“No.  What????”

I know she felt like a sucker.  I’ve been there.  That’s why I’m so adamant about creating business owners who are  informed Merchant Services consumers.  I could tell the only thing fighting back the tears was the anger welling up inside her.  She was just as angry at herself as she was at the rep.

What are her options not that she signed a contract?

1)  Call up the rep and raise holy hell and hope he eats the charges and gets her out of the contract.  He knew she was possibly closing when he signed her up.  Call up the company if that fails and try again.  (She had a 30 day review period and she was about 20 days too late to exercise it.)  But she can threaten to report them to the BBB and the local Chamber of Commerce.

2)  Close her business and her business account and hope they don’t come after her.  More than likely, she will get a ding on her credit and have a collections agent calling her to get the money and she can potentially be black-balled from Merchant Services over it.  (Not really a good option any way you look at it.)

3) Sell the business and hopefully convince the new owner to take over the contract.  The owner may do it.  But she also will be committing to higher fees and percentages than I would have given.

4)  Pay $25 (Plus) a month for 3 years until her contract expires.

5)  Pay whatever is required to get out of the contract.

 

 

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Wow, I’ve heard my share of company horror stories.  I’ll go into detail in a later post.  What I want to quickly say is, before signing on a dotted line, enter the company name followed by scam or complaints.  If the Merchant Services company you are dealing with is notorious for ripping people off, you’ll see reports on them.   Also, check the BBB.  See if they have complaints.  I hate to say it, but there are a lot of really bad companies that are more than willing to get you on a technicality or flat out lie.   Want an example, check out what is being said about Payment Systems Corp.

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