It is unfortunate that many credit card processing companies and/or their independent sales organization (ISO) agents allow greed to dictate their marketing practices in order to add new customers to their portfolio. This has been an epidemic problem for over a decade and I’m sure for much longer.
In 2002, when I first entered the merchant services arena as an ISO, my business partner at the time and I were trained by a young man whose sole purpose was to set up ISO offices for one of the largest processors in the country. The training was very thorough (or so I thought); however, the underlying message was, “let me show you how and where you can charge extra fees so that we can make a lot of money.”
Needless to say, my business partner was overly excited with the prospects of earning (and I really don’t know if I should refer to it as “earning”) big bucks. If I had to guess, my former partner probably dreamed of dollar signs dancing all the way to his bank account. Shortly after our training, my business partner and I parted ways and we haven’t spoken since. The last I heard, he was selling commercial real estate.
Since 2002, I have held my company out as a lone wolf in an industry that has had little or no regulations in the marketing and pricing of services. I have found over the past five years or so that the marketing tactics of ISO offices are ruthless. They will say or do most anything to get a merchant to sign an application and then the merchant discovers what they were led to believe is not even close to the truth.
Fortunately, I have been able to help many merchants escape from the strangling hold of their processing relationship, but sadly, there are two to three times as many merchants that will have to endure the pain and discomfort for one or two more years before I can provide them a true low cost alternative.
This past July 30, 2013, in the United States District Court, Eastern District of Washington, the Federal Trade Commission has filed a suit against an ISO office and their associated d/b/a offices to “obtain temporary, preliminary and injunctive relief, rescission of reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies and other equitable relief for defendants, acts of practices in violation of section 5(a) of the FTC Act, 15 U.S.C §45(a), in connection with the defendants’ market and sale of debit and credit card payment processing services and equipment to consumers.”
We can only hope the FTC will stand up to all the questionable trade practices of all ISO offices and processor offenders.