• Report: #274147

Complaint Review: Leaders ,Leaders Merchant Services

  • Submitted: Wed, September 12, 2007
  • Updated: Tue, December 18, 2007

  • Reported By:New London Connecticut
Leaders ,Leaders Merchant Services
725 Via Alondra Camarillo, California U.S.A.

Leaders ,Leaders Merchant Services uses bait and switch tactics and other fraudulent, unfair and deceptive trade practices. Camarillo California

*UPDATE Employee: Glitch in our system LEADERS will guarantee refund.

*Author of original report: Leader's steals $700 from my checking account today.

*Author of original report: The steps to follow when dealing with unscrupulous companies

*UPDATE Employee: LEADERS refunds upon the receipt of terminals authorized for return.

*Author of original report: Leader's is still taking money from my account

*UPDATE Employee: Leaders Merchant Services will close both of the merchant's accounts without penalty.

*Author of original report: Leaders has violated the terms of the contract and I continue to collect customer verifications as proof.

*UPDATE Employee: We have Spoken with the Merchant and Have a Solution for Her

*Author of original report: I will provide proof to attorneys and/or consumer advocacy groups showing LEADERS massages rates by selectively re-labeling qualified cards as non-qualified for their own gain.

*UPDATE Employee: LEADERS Would Never Use Bait and Switch Tactics and Will Do What is Necessary to Help the Merchant

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After reviewing my monthly statements, I've uncovered unauthorized batch fees, inflated transaction percentage rates, and other miscellaneous and buried fees. The company has declined comment and doesn't return phone calls.

I asked the sales rep to explain why I'm being charged the mid-qualified rate instead of the qualified rate on all transactions. I was told all of my customers have been using rewards cards.

Not believing it. I decided to verify the information myself. I called some of my customers and asked about the type of card they used. So far, no one used a rewards card. I'm in the process of collecting signed statements from my customers as evidence of fraud.

Not appearing on my statement, but disappearing from my checking account is $10.95 for the Premium Customer Care Program I joined by omission. This fee doesn't appear on the schedule of fees page of the contract; instead, it's listed on the pre-application page under the header please send a voided check. I found it with a magnifying glass. The company has agreed to stop future charges, but refuses to refund fees they've already collected.

They also charge a non-qualified per authorization differential of $0.15. This fee is not on pre-application but added to contracts fee list. Again, I found it with a magnifying glass.

Apparently, the company knows it is not an easy task to trace a card after it leaves the point of sale and the likely-hood of determining the card type after the sale is minimal. This makes it easy for them to classify all cards as rewards cards, an easy bait and switch tactic that is, potentially, untraceable.

I called Federal Trade Commission (FTC) and filed a complaint. Unfortunately, the FTC doesn't act on individual complaints, but stores complaints until they rise to the level of a class action lawsuit.

My next stop is the Santa Barbara BBB, followed by Connecticut Attorney Generals Office. Wish me luck.

Lynn
New London, Connecticut
U.S.A.


This report was posted on Ripoff Report on 09/12/2007 06:11 AM and is a permanent record located here: http://www.ripoffreport.com/r/Leaders-Leaders-Merchant-Services/Camarillo-California-93012/Leaders-Leaders-Merchant-Services-uses-bait-and-switch-tactics-and-other-fraudulent-unf-274147. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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REBUTTALS & REPLIES:
0Author 10Consumer 0Employee/Owner
Updates & Rebuttals

#1 UPDATE Employee

Glitch in our system LEADERS will guarantee refund.

AUTHOR: Sarah - (U.S.A.)

Sarah Tieman, Director of Operations at Leaders Merchant Services, definitely guaranteed that this merchant would NOT be charged any Early Termination Fees to have the accounts closed down. Unfortunately, there must have been a glitch in the system to have caused this merchant's accounts to each be charged $350 ETFs over two months after the accounts were closed down (10/1/07). Of course upon realizing that the Accounting Department made a mistake by charging the ETFs, LEADERS will refund the $700 to the merchant's account as soon as possible. Sarah has already left the merchant two messages regarding refunding the fees to her account. She also asked the merchant to please send a copy of her bank statements to show the charges for the most rapid refund resolution.

LEADERS did receive the two terminals from the merchant on October 24, 2007. The fact that the terminals were returned has nothing to do with the $350 ETFs for both accounts. Once again, the Early Termination Fees were mistakenly charged two and a half months after the accounts were closed, so this is an unexpected and embarrassing mishap that LEADERS will fix. It is important that the merchant contact Sarah back and send in her bank statements so we can handle this immediately.

We truly apologize for any inconvenience we may have caused the merchant.
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#2 Author of original report

Leader's steals $700 from my checking account today.

AUTHOR: Lynn - (U.S.A.)

Two months ago, the Director of Operations, Sarah Tieman, went on written record at both the Santa Barbara Better Business Bureau and Ripoff Report stating my account would be closed without penalty. Today, 12/14/07, $700 was stolen from my account for "early termination."

I am fed up with this company. I plan to exhaust all options for pressing criminal charges for theft. Today, I contacted the Ventura County Attorney General's Office and I plan to file a report. If any lawyers out there are interested in providing assistance, I can be reached at 860.227.0079.

If Sarah didn't receive the terminals, as she claimed, she should look for them in her company. The terminals were sent back to Leader's on or around October 18, 2008 and they arrived in CA on October 23, 2007. The USPS tracking number is 2305 0270 0000 7264 3450 and the information can be verified at www.USPS.com.

This company is BAD news.
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#3 Author of original report

The steps to follow when dealing with unscrupulous companies

AUTHOR: Lynn - (U.S.A.)

The best way to deal with unscrupulous companies such as Leaders.

1. Keep a running log of conversations include the date, time and jot dot the name of the person spoken to. Note what the conversation was about and the outcome of the conversation.

2. Go over the customer service representative's head if you are unable to resolve the issue.

3. Turn the company into the Better Business Bureau in the city where they reside.

4. Make EXTENSIVE use of ripoff report. Unscrupulous companies monitor website such as this hawkishly in order to maintain damage control.

5. Turn the company into the Federal Trade Commission (FTC). The Federal Trade Commission stores complaints. Enough complaints initiate a class action law suit.

6. Let other's know the outcome of your complaint.

Leader's finally closed my account but they never refunded the fees they overcharged from downgrading my customer cards from a qualified rate to a mid-qualified rate.
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#4 UPDATE Employee

LEADERS refunds upon the receipt of terminals authorized for return.

AUTHOR: Sarah - (U.S.A.)

Sarah Tieman Director of Operations with LEADERS spoke with the merchant on October 17, 2007 and advised the merchant upon receipt of the 2 terminals Leaders Merchant Services would reverse the $400.00 charge. The merchant has now put a stop payment on her bank account. LEADERS has not received the terminals
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#5 Author of original report

Leader's is still taking money from my account

AUTHOR: Lynn - (U.S.A.)

Please stop taking money from me!! I was charge $400 dollars for terminals. I don't want them. Tell me where to send them to you. I want my money back and Leaders out of my life.
Sara I tried to call you, but I can't get through. Please call me ASAP.
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#6 UPDATE Employee

Leaders Merchant Services will close both of the merchant's accounts without penalty.

AUTHOR: Sarah - (U.S.A.)

It is clear the merchant is still not satisfied with our service and our efforts to resolve her concerns. Therefore, it is in the best interests of both parties to close the merchant's accounts without any penalties. The merchant states they were being charged $10.95 month for our Premium Customer Care Package. We will refund the six months she has been charged.

We at LEADERS pride ourselves in providing our merchants quality service and we work diligently to remedy our merchants' concerns as they arise. Unfortunately, in this particular situation, we were unable to achieve this goal, despite our best efforts to do so.
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#7 Author of original report

Leaders has violated the terms of the contract and I continue to collect customer verifications as proof.

AUTHOR: Lynn - (U.S.A.)

Leaders' explanations are irrelevant and an attempt to confuse the situation. It doesn't matter what information is or is not stored in the magnetic strip. My transactions are being downgraded by Leaders.
For Leaders to say that my customer's banks is are mistaken on the cards they issue is ludicrous. They have nothing to gain by doing so. Leader's on the other hand has much to gain, financially.
The Director of Operations at Leaders told me First Data Resources (FDR) processes the transactions for Leaders so I contacted FDR who told me that is statistically impossible to have as many rewards transactions that I've had.
Leader's reprocess my transactions correctly, give me my money back, and let me out of the contract!
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#8 UPDATE Employee

We have Spoken with the Merchant and Have a Solution for Her

AUTHOR: Sarah - (U.S.A.)

LEADERS truly apologizes for any misunderstanding that this merchant has had about her two merchant accounts. She notes that her bank account has been charged with unauthorized fees and that her transactions are downgrading to higher rates inappropriately.

As Director of Operations, I had a conversation with the merchant on 9/20/07. We discussed that she felt that she was being charged Batch Header Fees because a Customer Service Representative told her that certain Transaction/Authorization Fees were such. I explained to her that the CS rep was incorrect and that LEADERS is definitely not charging her Batch Fees on either of her accounts.

We also discussed the Non-Qual Per Authorization Differential, which was assessed on ONE of the merchants accounts, which she had signed for. She said that the account executive had not explained this fee to her. I noted that since it was only on one of her accounts, it was likely an oversight and we would remove it immediately.

The merchant notes that she did not opt-out of LEADERS' Premium Customer Care (PCC) program when she signed the applications. Both were signed on 4/4/07. On one account the PCC program was cancelled the next month, and on the second account it was cancelled in September. This is a total of 6 months of PCC ($10.95) charged to the merchant. We did not discuss this today, but we will issue her a refund for these 6 months. The CS rep she spoke with previously did not offer her this refund, but should have.

Lastly, the merchant was upset about her transactions downgrading. I did some research on her transactions, and she is processing mostly Rewards cards. She told me that she asked her customers if their cards were Rewards cards, and they asked the issuing banks and said their cards were definitely not Rewards cards. I apologized that this was the information given to her, but the terminal reads the magnetic strip on the card, and that transmits the data that the card is a Rewards card. We have absolutely no control over the encryption on a card and we do not determine the categories to which cards are assigned. This is done by Visa/MasterCard. If a card is categorized as a Rewards card by the data contained on the magnetic strip, then it will be processed as a Rewards card. I offered to set the merchant up on a special 4-tier rate grid with a special Rewards rate so these cards would not downgrade. She currently declined the special rate plan, as she would like to revisit the issue with her customers and their issuing banks. I left the offer on the table, so it is still available to her for both of her merchant accounts.

Once again, LEADERS apologizes for the misunderstanding and is willing to do what we can so the merchant is satisfied with her account and our services.
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#9 Author of original report

I will provide proof to attorneys and/or consumer advocacy groups showing LEADERS massages rates by selectively re-labeling qualified cards as non-qualified for their own gain.

AUTHOR: Lynn - (U.S.A.)

The cover-up continues. LEADERS is lying when they deny reclassifying cards. I have uncovered their scam and I have proof of it. Theyve been doing it to me for 6 months. Many of my customers have verified their card types with their banks and have provided me with written statements of their verification.

Most merchants dont store credit card numbers, client names, addresses, or phone numbers. This makes it virtually impossible for a merchant or anyone else, for that matter, to track card types as debit, reward or non-reward after leaving the store. This flaw in the system, allows LEADERS to manipulate, to their advantage, the rates they charge their merchants. This is tantamount to bait and switch. I wonder if LEADERS is using this system flaw to manipulate all of their customers rates like theyve done with mine. They could be raking in millions. Who would know? Maybe they should be audited.

For LEADERS to say that neither I nor my customers has the ability to recognize a rewards card is an attempt to place doubts in the minds of the readers and undermines what Ive previously stated.

I would like to remind the readers that the minor batch fees, Premium Customer Care fee and other miscellaneous fees are symptomatic of a much larger issue. LEADERS overcharges on rates by reclassifying cards.

If the $10.95 Premium Customer Care charge was so clearly stated in the pre-application it wouldn't have been buried. It would have been written in an easily readable 12 point font instead of an 8 or less point font. If LEADERS wanted their charges to be clear, they could have listed all of them in the contract but they didn't. They've diluted charges over multiple pages of the pre-application and the contract. It makes the charges difficult to follow.

Leaving fees off the statement and making the statement difficult to read is not an accident. LEADERS doesnt want its merchants to know what they are REALLY paying for service. It also provides a smoke screen for a larger, more lucrative scam.

LEADERS should to do the right thing, the only real acceptable solution. I want all of my previous charge cards reviewed, the cards correctly reclassified and a refund of the monies that are rightfully mine, batch fees included. Then, I want out of the contract without early termination fees or other unwritten penalties. LEADERS could never earn my trust again, never. Ms. Fietsch, Ms Tieman you should be contacting me. I shouldnt have to chase you down.
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#10 UPDATE Employee

LEADERS Would Never Use Bait and Switch Tactics and Will Do What is Necessary to Help the Merchant

AUTHOR: Sarah - (U.S.A.)

LEADERS regrets to hear the merchant is not satisfied with the services she received and that she feels our company has used a bait and switch tactic, as well as deceptive trade practices. LEADERS prides itself in providing our merchants with quality service as well as full disclosure of all fees, and does not like to hear that anyone has an unpleasant experience with us. All of the fees assessed to the merchant are clearly identified in the documents signed by the merchant, and we never engage in Bait and Switch tactics. Nevertheless we would like to remedy as many of the merchant's concerns as possible.

The merchant states that the Premium Customer Care charge of $10.95 did not appear on her statement but disappeared from her checking account. This monthly charge of $10.95 is clearly stated in the signed Pre-Application and indicates this amount will be debited at the beginning of each month. The merchant is given the option to opt out of the program by initialing at the bottom of the Pre-Application. The merchant did contact our Customer Care Department on May 2, 2007 to have this service cancelled. We are happy to consider any request a merchant has on their account and are more than willing to offer a refund in this case, although our records do not indicate anything about refusing a refund previously. We apologize that this did not happen in May, and will issue a refund of $10.95 for the months of April and May.

The merchant states they are being charged the mid-qualified rate on all transactions when they should be charged the qualified rate. Our signed application clearly shows all three rate tiers which apply to the merchant. The merchant states when she contacted our Customer Care Department they informed her this is because she is accepting rewards cards, which are not eligible for the qualified rate. A merchant or consumer may not readily recognize a rewards card as these are Visa and Master Cards that award consumers "points" for usage, and as such, these cards are not eligible for the qualified rates. LEADERS does not typically know the type of Visa/Master Cards a new merchant with us is accepting and therefore, we set the merchant up with the best possible overall rate structure at the time the merchant signs on with our company. We do however, restructure merchant accounts to better accommodate the credit cards being accepted at their establishments, once a profile is established and a merchant requests that we re-rate their account. We strongly urge the merchant to contact Corrie Fietsch, our Manager of Merchant Services, or Sarah Tieman, our Director of Operations, at 877-538-3377 to get their account re-rated so that we can better match the merchant's processing profile to their processing rates.

LEADERS truly values our merchants and endeavors to resolve any credit card processing issues to the merchant's satisfaction.
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