Information on the ISO which were found to be dishonest by FTC

Recently FTC sued the ISO “Merchant Processing Inc”, two company affiliates of Vequity Financial Group along with “Direct Merchant Processing Inc”. Besides, the president and vice-president of the company were also sued for utilizing deceptive tactics for selling the processing services for debit card and credit card for small businesses.

This is a commonly found phenomenon of the merchant account industry. These “merchant account ISO programs” were giving improper information regarding the charges. Many merchant accounts ISO programs refuse to reveal all the charges associated with the merchant account they provide. Sometimes these charges will be quite higher that the account holder will not be able to pay. After this incident, the FTC had hinted at enforcing strict laws for consumer protection. This incident has created awareness among people. The complaint made on them will help you to understand how these “merchant account ISO programs” mislead the applicants.

They told the customers that they will be charging a lower rate of discount and transaction charges on debit cad and credit card transactions and merchants can save money with the use of their services. The other offer by them was that the funds of transaction will be given to the merchants within a day. Merchants will have to purchase or lease terminal equipment for using the services of these “merchant account ISO programs”. They will be buying out the lease equipment agreements which the merchants will already be having with other providers of merchant account.

They had written contracts for their merchants. This was done after the presentation of sales by the ISO or agents. The details provided in the contract were varied from that of the presentation. There was a difference in the charges.

After signing the contract, many of the customers realized the fees associated with these “merchant account ISO programs” were very high compared to the previous agreements for processing of credit cards. They also realized that extra charges were taken from them which increased each transaction cost than what was mentioned in the contract. Sometimes the transaction charges were more that the actual transactions that took place. They also withdrew extra money in the form of monthly charges directly from the bank account of the merchant. Some of the customers had to pay the charge even after the cancellation of their contracts with them.

These “merchant account ISO programs” also gave false information about processing equipment for bank cards. Merchants realized later that there was no need for them to buy  the new equipment for using the processing services of the company for bank card transaction. The cancellation of the processing service did not help the merchants from agreements for costly equipments. The customers had to pay for the equipments that they did not use.

The best way to escape from such frauds is to have the required knowledge on al the aspects of merchant accounts before signing the contract with “merchant account ISO programs”.