Merchant Processing Incorporated ripoff deceptive sales practices left no copies of contract scammed me to lease processing terminal I didn't need all a fraud in order to lock me into a lease they claim is noncancelable Beaverton Oregon

Merchant Processing called me and said they were credit card processors who were directly linked with Visa and Mastercard. They said they were thus able to operate without many of the fees other processors required. I agreed to meet with them. They sent Mr. Sean Hersey who came to my store around 4:00pm April 12, 2006.

He used my monthly summaries from my current credit card processor to show me how they'd save me money. He quoted me some good rates and said they don't qualify cards, so no extra fees for rewards cards, etc. He said I would have to sign a four year agreement to get the fees he quoted and that they wouldn't raise their fees for the four years. He also said I'd need to use their credit card processing terminal for this because they couldn't program mine. Mine was brand new and working great.

He said the terminal would be $49.95 per month. I told him it would cost me more than I was paying right now to use his system with the new terminal as he proposed. He assured me that their rates were so low and that I wouldn't pay all these miscellaneous fees I'd been paying so I'd save lots of money even with the lease.

He showed me again with my current credit card processor's monthly summaries, why my savings would still be great even with the $49.95 per month.

I said that sounded better than what I already had, so I agreed. We went through the contract. There were actually two contracts, although I didn't realize it. One was for credit card processing. One was for a lease for the terminal.

I read parts of the contract(s) with Mr. Hersey explaining supposedly what I'd signed. I asked questions as we went and he always had a plausable answer. These guys are taught well in the act of deceptive selling points. Something to note is the placement of the provisions in their "contracts". I read the headings on the pages and the first few paragraphs. They appeared to be what Mr. Hersey was explaining, so I felt it was OK to skim the page. When I finally got my copies of what I'd supposedly signed, I found they had buried in the paragraphs on the lower portion of the page, provisions which had nothing to do with the foregoing discussion.

On the page where their heading said Merchant Processing Inc. Guaranteed Prices, more than half-way down the page buried in a paragraph about something else, they start talking about how the lease for the terminal, which is supposedly through another company, reverts back to them in the event of default.

Nothing is as it seems with these people.

During the signing process, in response to the contract saying "I the undersigned have received copies of the contract", I asked Mr. Hersey about my copies of the contract. He'd said I'd get them when we were done signing everything. I thought that made sense, so I continued.

However, after our signing session, Mr. Hersey picked up all the documents and put them in his briefcase. I said I needed my copies and he said they needed to be "processed" at Merchant Processing Inc. and he'd send me copies. I said that was unusual and he said that's how they are set up to work.

I've thought about this over and over again and can't figure how I was so studid. I was tired. By the time he left my store, it was 7:00 pm. He'd been there since 4:00pm.

What I've since realized is that I was the victim of a sophisiticated scam. Everything these people did was a part of the scam designed to allay victim's fears. I'm sure they've got a script they have to follow. Judging by the amount of people describing the same scenario on this website, Merchant Processing and their related partners have their scam down pat. What I don't understand is why they haven't been stopped by now.

Continuing with my sad story, After Mr. Hersey left, I realized I had not one scrap of paper from him. Not even his business card. In fact, he picked up all the notes of calculations, too. He was thorough.

I didn't have any way to contact him or his company. A few days later, we received this cheap hypercom terminal and instructions on how to plug it in. Mr. Hersey had said to plug it in when we got it and use it because by the time we received it our previous processing company would have been terminated and I'd have no way to receive credit cards unless I used Merchant Processing's terminal.

That's what we did.

Little did I know that this process of hooking them up and using their terminal was "verbalizing my contract with them" and by doing so, I had agreed to all the terms in their contract.

I still had no other contact with them until May 1, 2006 when I received two letters. One was my monthly credit card processing summary from Merchant Processing and one was from a company called Lease Capital Group (also RPSA, Inc. 16604 S. 107 Ct., Orland Park, Illinois 60467).

The summary from Merchant Processing floored me. They had charged me for items I was told I wouldn't be charged for. They were more expensive than my previous processor. Add the cost of the terminal, then I was paying 2 times what I'd paid before.

The letter from Lease Capital Group also known as RPSI was even worse than the one from Merchants Processing. They said I had a 48 month noncancellable lease with them for the hypercom terminal for $2400.00. They had sent a copy of the contract I had supposedly signed with them. It was awful. I could not remember having seen anything that was included in this "lease contract" before. I certainly didn't remember talking about it with Mr. Hersey. If I had seen "noncancellable lease", you can be sure I wouldn't have signed it.

It must be noted, the terminal they sent wasn't even capable of what Mr. Hersey said it would be. It was supposed to be used by the customer to swipe their card. This one must be done by the merchant. It was a used, cheap piece of crap. Probably not worth more than $300.00 new. It was also programmed wrong because it wouldn't authorize debit card sales. I later found that the money was actually taken out of my client's accounts even though there was no completed authorization through the terminal. That money wasn't placed in my account. But, that's another story.

The letter Lease Capital Group sent with their noncancellable contract said I had signed this lease and I must also insure the terminal and send them a copy of the proof of insurance or they would debit an additional $2.50 per month from my account.

I called them as soon as I'd read their letter and said there must be some mistake. I didn't sign any such thing as their noncancellable lease. They said I had and also since I'd already used it I approved the whole agreement. I told them this was the first copy I'd seen of anything from my dealings with Merchant Processing and I had no copy of any lease or contract with Lease Capital or Merchant processing. They said too bad so sad, I'd signed it it was mine. They said Merchant Processing should have sent a copy of my contract. Capital Lease gave me the number to call Merchant Processing.

I called Merchant Processing and said there must be some mistake, I hadn't signed any such lease with Lease Capital. I also said I hadn't received a copy of anything from Mr. Hersey and so I had nothing from Merchant Processing and this bogus lease from Lease Capital. I also said I had reviewed my statement summary from Merchant Processing for the last two weeks of April and that the terms I'd spoken with Mr. Hersey weren't reflected in my statement.

I said I was charged for reward cards and other fees that Merchant Processing's salesman said I wouldn't be charged. Diana from Merchant Processing told me that my fees were still cheap. I said not when you factored in the $55-plus that Lease Capital Group had taken out of my account. I said that I was paying twice what I'd paid for the same type and volume of card charges with my previous credit card processor. Diana said she'd look into my claims and call me back. I reminded her I still needed a copy of my contract from her company.

Diana didn't call back, so I called again the new day. She said I'd signed a contract too bad so sad. I said this was fraud I wanted to talk to a manager. She said she was a manager. I said I was going to send the terminal back. SHe said it would just be sent back to me. I realized then that I was not getting anywhere with her. I told her again I needed copies of my contract.

I called Caroline at Lease Capital Group and told her what had happened with Merchant Processing and could she help. She said too bad so sad.

On May 6th, I finally received a copy of a contract from Merchant Processing. When I read it, I was appalled. Of course, I called Merchant Processing and Lease Capital again to no avail. I called a lawyer who told me to contact the BBB, send letters to the companies and contact the local DA. The lawyer said it was fraud and that there is no contract if I didn't receive copies at the signing.

I did everything the lawyer said and also filed a complaint with the FTC and closed my business checking account. I am now filing this report and I'm going to report the companies to the Attorney Generals of Texas, Oregon and Illinois.

What I have learned about Merchant Processing Inc. is that they are actually in the business of selling bogus leases for large sums.

They approach small mom and pop merchants in the guise of selling credit card processing agreements. In my case, Lease Capital Group supposedly finances the lease for Merchant Processing Inc.

The fact is the money for the lease goes to Merchant Processing. The hypercom terminals are owned by Merchant Processing Inc., shipped from Merchant Processing Inc. "warrantied" by Merchant Processing Inc., etc.

This is all a scam by Merchant Processing to
sell these bogus leases.

1. They snow the customer with promises of low processing fees.
2. They say if you lease this terminal, we'll guarantee those fees.

3. They get you to agree, they rush you through the contract signing.
4. The only thing they really want signed is the lease contract.

5. They obscure the top of the page while you sign at the bottom of the page.

6. They take all pieces, every scrap of paper on your desk and leave you no copies of anything and no way to contact them.

7. They tell you to plug the terminal in right away when you get it so you don't lose sales.
8. They send it only with instructions to plug it in.
9. They get you to use it, thus,"verbalizing" the contract and authorizing it.

10. After you've used it, they send letter with copy of noncancellable lease.
11. They only send other "contract" under duress. If at all.
12. They claim you signed everything, so it's yours. They hope you keep being trailed along so they can charge you more and more.
13. They tell you that if you break the contract with Merchant Processing that the contract you signed requires that you pay them Over $750.00. They just keep taking your money from your account.

I closed my account. I'm sure they'll send their creditors. However, I'm going to do what most people don't have time or money to do. I don't have the money but I have time. I will contact any and everyone to report this fraud.

I'm sending their worthless terminal back to them with plenty of certification.

Karen
New Braunfels, Texas
U.S.A.