Credit card processing “deals” may be scams

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If you’re in a small business, you probably need a way for people to pay you and ways to lower your costs. Scammers have been working both of those angles, promising businesses that they can save on leases of credit card processing equipment. They’ve also been promising that businesses can cancel any time. But is that what happens?

In a word, no. Businesses can end up paying thousands to lease equipment that would have cost only a few hundred dollars to buy. When the business can’t cancel the lease (despite the promises), it can have trouble if it stops paying. Those lease agreements can hold the business owner (or the person who signed the lease) responsible for the debts. And the agreements can require that legal disputes are heard in another state. Some scammers have even pretended to be the business’s current card processor – people have been tricked into signing new contracts when they thought they were just updating paperwork.

To avoid this and other scams against small businesses:

  • Don’t be rushed. Scammers want a quick decision. But you need to read the contract and check out the company.
  • Do your research. Search the company’s name online with words like “scam” or “complaint.”
  • Get it in writing. You’ll want to see all the terms in writing before you sign. If you don’t get them, walk away. If you do sign, be sure to get a copy of the entire document, especially if you sign electronically.

The FTC and several state attorneys general recently announced a law enforcement sweep cracking down on scammers that targeted small businesses. Check out our new Scams and Your Small Business brochure to learn more about what to watch out for, and share the information with your team.

 

Blog Topics: 
Jobs & Making Money

Comments

Thank you

I was a small restaurant owner, signed up to receive credit card for business, once I have found out the service charge was up to almost 5% of each check, I tried to stop the contract, they sued me and ruined my credit; I thought it was my fault. it was a nightmare for years; since then, I never use credit card anymore! I have learn this in 80’s, unfortunately these companies still scamming our consumers in our society. Hopefully FTC can do something to stop them, I believed they have use “credit scam” to profit themselves and “cheat “ people to borrow money from credit card then overuse their credit, if they charge more than 20% of interest rate, do you think it’s reasonable?

Hello. Is it possible to write to your office? I understand this is for email but this is difficult without a computer. I use my cell phone.
I've been through just about every attempted scam your office can fathom over many years. I've run the gammet! Unrelenting telephone calls prior to these Neanderthals flying around cyberspace and naturally the good ole "junk mail" kind. Basically annoying, but harmless in comparison.
I wish I was younger and could work for your organization. I believe in you but by the same token unless you've been in the soup pot it's hard to know the heat. A great example is this. To date and over as many years I have possible been the attempted Scamee tnvolving the name of a well known bank in the United States, not to say AT ALL that the bank is involved . Instead just like Western Union Moneygram, their name etc is used. How would you feel if you received ( via your email) an important Security Notice that your account has been frozen due to numerous incorrect password entries AND YOU HAVE NO BANK ACCOUNT WITH THAT WELL KNOWN FINANCIAL INSTITUTION? Not once or twice but a few different times throughout the years? I can tell you that the bank has no great concern and I would never have bothered with them again until ( last week ). Again. I remember calling moneygram a couple years ago and getting nowhere. I have no intention of spinning my wheels again with this large bank ( again). I've learned if they don't show concern initially except to warn you about scams and what to look out for yada yada and you get information on other avenues to take also, your starting a marathon runaround.
Anyway, too long of what reads as a saga. I'd be more than happy to send you a lot of different information if your office could use. I would feel like I maybe helping in some way. Maybe my information won't help but I'm willing to spend some time to try. Without going blind here on my cell. Lol
If I do not hear back it's ok as I'm sure you get a lot of other letters. t least I hope so. It would mean other people are trying to help too. But either way, don't stop doing what you do because it can only help!
Regards

Thank you for your message. If you spot other scams, you can report them to the FTC's consumer response center at 1-877-382-4357.

Thank you for this! If only I had known before hand! I was a victim of this. Although I don't like to use the word "scammer" I fell for the bad deal. One of the other things they did was put two leases in front of me for the same equipment, but from different vendors. The cost of the lease was the same, but the terms were very different between the two leasers. They had me execute both because they weren't sure which one would qualify me for the equipment. Of course, I got locked into the "non-cancellable" policy and will be paying over 5 times the value of the equipment if I were to buy it new!

What is wrong with these people & their employees. Don't they realize they are stealing or committing crimes? Why isn't more being done to stop them?

I had a lease with a company called "Lease.com" which I could not cancel, or find online for credit card processing. They charged money without the use of their credit card processing. This was reported to credit bureaus.

If it's a scammer and not a legitimate company, how can they get you in legal trouble for not paying them? The "contract" that you sign can't really be a contract. If you can owe money to a scammer, something is wrong.

Real companies can and do have abusive and even flat out crooked practices. Just look at continuity merchants (businesses that use a free trial to lure you in without realizing that you just signed up for a subscription to their product and will be automatically charged). They are real businesses with real products, and yet one could easily argue their method of selling is underhanded and leaves many customers feeling robbed

This is scary because it uses the legal system to maintain the scam. I imagine it's hard enough to sustain & grow a small business w/o having to contend with immoral vultures like this. Good to read that law enforcement is zeroing in.

This has been going on for quite sometime and the FTC has been dragging their enforcement of this credit card machine scams. The Attorney General' Office should be involved with this as well.

Thank you for continuing to alert us to these scammers.

I received a phone call "FROM MY SON WHO SAID HE WAS ARRESTED BY THE POLICE IN FLORIDA, WHILE RIDING IN A UBER CAR AND POLICE FOUND DRUGS IN THE CAR." The driver said that the drugs belonged to my son and his friend. The young man did sound like my son. I was given the name and telephone number of a LAWYER STEIN - 1-647 - 285- 5045. He WANTED $4,000.00 for bail money for my son. I was told to go to Walmart and get Gift card and then notify Mr. Stein. When I tried to call Mr. Stein back from my Cell Phone, the call would not go thru. I went home and called Mr. Stein from home and was told that if I did not send the Gift Card that my son would be staying in jail. I DID NOT SEND ANY MONEY/GIFT CARDS TO MR .STEIN.

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