New type of scam (merchant service)

[ILLMAS]

Today I found out there are merchant service brokers, just like insurance brokers that help you find a good deal.  My client signed a deal with a broker to find credit card merchants that had lower fees and every time he found one he would move the account to a new merchant.  But what the merchant broker failed to inform my client was that he would be paying a hefty cancellation fee each time the account was moved.   Does this sound like a scam or is this practice common?  

[kcjenkins]

Clearly, the cost of the cancellation fee should have been included in any comparison of whether moving was a good deal. 

[jklcpa]

Doesn't sound like a scam to me. Cancellation fees are spelled out in the contract.

[MsTabbyKats]

Sounds like your client didn't read the fine print.

[Lee B]

I've had several retail clients taken advantage of by less than truthful merchant service reps.

 

The problem is that this industry has very little in the way of regulatory scrutiny, so that sometimes

 

it looks like the "Wild Wild West". There are a number of reputable merchant service firms that don't

 

charge sign up fees, cancellation fees on a month to month agreement (no long term contract).

 

So it's buyer beware.

[Eric]

It's a cut-throat market.  A lot of people starting out figure they can just do a little searching to find a company offering service for a the lowest price possible, and fail to take into account things like long term contracts, cancellation fees, misc. service charges, other hidden fees, and actual quality of service.

 

I think you usually can avoid a lot of issues by just going to a local credit union and seeing what they offer.