Better Business Bureau Warns Small Businesses Against Merchant Services Direct
Not all merchant services companies have small business’ best interests in mind.
On November 3, the Better Business Bureau issued a warning to small businesses near Lafayette, LA against Merchant Services Direct, a merchant account services company that also does business as Sphyra, LLC.
According to a KATC 3 article, Merchant Services Direct is in the midst of settling Federal Trade Commission charges that state the company allegedly “used deception and unsubstantiated claims when enrolling businesses” for its merchant payment services and other processing equipment.
Examples of Merchant Services Direct’s allegedly deceptive practices include tricking merchants into signing legally-binding contracts by telling them the contracts were price quote applications and deceiving merchants into leasing new credit card processing terminals that they didn’t actually need, according to KATC 3.
As a result of Merchant Services Direct’s disreputable business practices, the BBB has given the company an F rating, KATC 3 reports. Merchant Services Direct has had 76 customer complaints filed with the BBB.
Merchant Services Direct is now required to shell out $175,000 in its settlements with the Federal Trade Commission and the Washington State Attorney General, and will be strictly monitored to ensure it no longer uses the same allegedly deceptive sales practices.
Here are a few tips to help you identify less-than-reputable merchant services companies and choose the best merchant services companies instead:
- Always ask questions
- Avoid banks; it’s better to opt for a true merchant account provider
- Make sure the company’s fees are reasonable — but not so low that important corners are likely being cut
- Never choose a merchant services company that places caps on their clients’ monthly sales volume
What are your thoughts on this story? Have you ever come across an unethical small business merchant services company? Share your opinions and experiences with us in the comments below.