Credit card processing scams

A #WiseChoice is ready to protect you from one of the most common scams against small business.

I’ve been on the business end of a credit card processing scam, one that hit close to home. In fact, it ended up right in my driveway.

I detailed a part of it in this #WiseWarning. Between 2000-01, I conducted an investigation in which a Bartlett, Tennessee, businessman pulled this very scam. His family and friends thought he was in real estate. He was really crafting fake leases for computer equipment and payment processing systems, billing his targets for the leases and for the non-existent systems named in them. By the time my stories got the attention of federal agents and prosecutors, the man had racked up more than 50 victims, including two corporations.

Before law enforcement started following up my investigative reports, the guy stalked my family and my home. He showed up in my driveway while I was on the phone, skidding off in his truck when he saw I was in the garage. My home was for sale then. He called my agent to arrange a showing, trying to get inside my house. Before he became a real threat, a federal grand jury indicted him on mail and wire fraud. The FBI invited my camera crew and me to cover his arrest. We did — with great joy. He ended up in federal prison for over a decade.

We caught him. He paid for it. But the Federal Trade Commission (FTC) said more credit card processing scam artists are getting away with it. “Scammers have been…promising businesses that they can save on leases of credit card processing equipment,” said Emma Fletcher of the FTC’s Division of Consumer and Business Education. “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, it can have trouble if it stops paying.

“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.”

Brian Edwards is principal and CEO of Flat Rate Solutions/Everything But The Food, your #WiseChoice for credit card payment processing and point-of-sale systems. He said small businesses must do their homework on the payment processing vendors they’re considering — check their Better Business Bureau service histories, lengths of service and business client references.

Edwards added that the payment processing vendor’s sales agent is the window into the vendor’s integrity. “Most credit card processing sales folks have a good bit of flexibility with how they write up the terms of a deal, so the overall experience, as well as the transparency on terms, pricing, etc. is largely based on the sales agent you are signing up with,” Edwards said. “Because of this dynamic, it is important to have a good relationship with your payment processing sales agent on the front end and on an ongoing basis. Things change multiple times a year in the payment processing space, and it is important to have a good sales agent to be an advocate for the business owner if something comes up.”

To avoid signing on with a dishonest credit card processing outfit, the FTC recommended:

• Don’t be rushed. Scammers want a quick decision. 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.

Do your due diligence, for yourself and for your small business. Hire a reputable payment processing company like Brian Edwards’ Flat Rate Solutions.

And don’t hire a deception that ends up stalking you in your driveway.

Copyright 2018 Wise Choices TM. All rights reserved.