My report is almost identical to the 5/31/06 Rip-Off Report filed by Karen of New Braunfils, TX (revised 6/6/06). Here's the chronology of my situation:
In early May, 2006, I received a call at my business from a woman who said she was calling to offer me better rates on our Credit Card processing. When I told her we were on the National Do Not Call list, and don't want solicitations over the phone, she said that she was with Merchant Processing, Inc., and that they did all the processing for Visa and MasterCard, that all merchant processing services went through them directly for Visa and MC processing. Because of this, they could offer me lower flat rates and fees for all Visa and MasterCard processing, as there would be no "middle man." She said they could send out a representative to come and do a comparison with our current Merchant Services company--CostCo/Nova. I agreed to have their representative come and meet with me.
5/16: MPI's representative, Jorge Lara came by to meet with me. He asked me for my last 5 Merchant Services statements (from CostCo/Nova). He did a bunch of calculations in his laptop, using software that he said compares the charges to what they would be with Merchant Processing, Inc., directly with Visa/MasterCard. He stated that the discount rate for all Visa/MasterCard transactions would be 1.65% no matter what kind of card is used, with a 16 per transaction fee, and 30 transaction fee for debit cards, with no discount rate. He figured that I would save about $126 per month (average) because 30% of cards used are debit cards, and I would be avoiding the discount rate charges. He said I would have to lease a new processing machine from them for $39.95 per month for 4 years, one that accepts debit cards.
I told him I could get a keypad now for $99 and process debit cards, but by the nature of our business, there's no time for entering pin numbers into a keypad for our transactions, and our students with Master Money Cards (debit cards with the Visa/MC logo on it) won't wait to enter them in the keypad, they will just have us swipe their card like a Visa/MasterCard. He said the machine I would be leasing differentiates between Credit Cards and Debit Cards when they are swiped, and it would automatically process the Master Money (debit) Cards as debit cards, avoiding the discount rate charges to me, even without the pin code being entered into the keypad. I would only need the keypad and pin entries for straight Debit Cards only. I went over this specifically with him about three times, because this was the key point in being able to actually reduce my processing charges or not.
I asked if I could purchase the equipment up front like I did my last one, he said no, I would have to lease it. I asked if it's a lease to purchase, and he said yes, I could then own the equipment at the end of the lease.
I asked if there were any other charges or fees, even hidden charges, he said only a $10 per month statement fee. He said even with the $39.95 per month and the statement fee, I would average $126 savings per month.
He told me I would have to sign up then to get the flat rates, because it was a limited time offer from Visa/MasterCard. I was still believing he was representing them directly, as he said he was (just like the initial caller), and that I would be dealing directly with Visa/MasterCard with no more middle man. I asked him if I signed up then, and decided I wasn't satisfied, if I could cancel the whole deal, he said yes, within 30 days. I asked if there would be any cancellation fees, he said no, and that they would even get my previous Merchant Services re-established and pay any fees for that.
I signed the papers, noting one for the equipment lease that said it was uncancellable. I asked if I was supposed to sign that, and he said he wasn't sure, he thought he signs it, that it's for his company, and I just fill out my information who will be using the equipment. So I assumed I would just be leasing directly from them, paying them the $39.95 per month, that the automatic charge to my bank account would be part of their monthly statement/bill.
I asked Mr. Lara about my copies of the papers (we don't have a copier), and he said that as soon as it gets submitted, they send me copies right away.
He gave me his business card and said I could call him anytime, to call when the equipment arrives, or if I decided to cancel the deal.
5/19: Mr. Lara called me and said there was one signature we missed, and he couldn't submit it all until it was completed. I was quite busy, but told him to come by and I signed the last one. I didn't look at it closely, he just said it was his oversight and we just missed it. (It seems that was the non-cancellable equipment Lease).
Week of 5/22: I received the Verifone Credit Card Processing machine. I tried to call Mr. Lara at the 800 number on his MPI business card asked for his extension number on the card, but he is not listed in the Company directory, so I got a Customer Service person named Julie. I told her our Verifone arrived, but I hadn't received any of the paperwork or contract copies back or heard anything from them. She said she would have my Sales Rep. (Mr. Lara) call me back. Never did.
5/26: Not being able to get a hold of Mr. Lara, I called the Tech Services number included with the Verifone. With the help of the Tech rep., Bryan, I plugged in the Verifone so we could test it. Doing 4 tests, which we Voided (so no transactions would appear and be charged for), I could see the machine didn't do what Mr. Lara had said it would to save me money, namely it didn't differentiate a Master Money Card (debit card with the Visa/MC logo on it) as a debit card for purposes of the transaction fees charged to me by MPI, unless the keypad was used, which would be almost impossible the way we do our business, as I explained to Mr. Lara. So it wouldn't help me afterall, I wouldn't be saving money on debit cards swiped without using the keypad. I found out later no machine does that.
The Verifone's software also required the 3 number security code for manually punched in transactions, which would be a huge, and unnecessary burden on our existing way of doing business. Mr. Lara said it was a legal requirement to use them now, but I found out later it's not, it's a security convenience only for the Merchant in case of Charge-backs. So Mr. Lara had lied, or at least misinformed me in selling me the machine. It was to no advantage to what I already had, was actually more of a burden to use, and (I would find out later), was really about a $300 machine (purchased new) I would be paying over $2,300 for. I unplugged it, packaged it back up as it was, and put our existing machine back into use. No charges were made on MPI's Verifone machine.
5/30: I called MPI Cust. Serv. again, and talked to Jennifer. I told explained to her about the machine, that it would actually cost me more to do business with them, plus the huge expense of a machine I didn't need or want. I wanted to cancel with them, as Mr. Lara said I could. She said she couldn't cancel me, the sales rep would have to talk to me. I told her I had tried to call him, that I never heard back from him. She said that she would have him call me. Never did.
6/1: I sent an e-mail to Mr. Lara (using his e-mail address on his business card) explaining everything to him, and how if I didn't hear from him by Monday 6/5, I would cancel with MPI as he told me I could within 30 days.
6/2: I found my e-mail to Mr. Lara had been returned to me from firstname.lastname@example.org (gotompi.com is MPI's website), with the subject line stating Delivery Status Notification (Failure).
Impatient, and not hearing from Mr. Lara, I called MPI Cust. Serv. and got Jennifer again. I told her I wanted to go ahead and cancel the whole thing. She said I couldn't, the Lease for the Verifone was non-cancellable. I would have to call the Lease Company, which was separate from them. I said I would do that. I said I didn't want to do business with MPI now, and I wanted to cancel with MPI. She got a bit rude, but finally said I could send a Cancellation letter to them, with our business name, merchant ID #, reason for cancelling, and my signature.
I asked if I send it to the address on Mr. Lara's MPI business card, she said go ahead and send it there. I asked where to send the Verifone back to, she said to the Deployment Department, where they are sent out from, and confirmed the return address on the box it came in, an Oregon address. I was still under the impression MPI's office was in San Diego, as it's stated on Mr. Lara's MPI business card.
Sunday 6/4: I wrote up a Cancellation letter for MPI, addressed to the San Diego address on Mr. Lara's MPI business card. I included a detailed figuring of how Mr. Lara was wrong, and MPI would actually cost me more money than my current Merchant Processer, CostCo/Nova. I explained the equipment was not useful to us.
6/5: I received a letter from a company called Lease Finance Group, LLC (LFG), dated 6/2, with details of the Verifone equipment lease.
I called LFG, talked to Tangie. I explained about the Verifone, what the MPL sales rep told me, as well as what the Cust. Serv. rep. said. She said that MPL and their sales rep are not agents of theirs. The lease is binding, because they paid MPL for it. She told me not to send the machine to anyone, not back to MPL, because they (LFG) own it. She did say that I could write a Letter of Misrepresentation and send it Attn: Lessee Affairs Dept. at LFG, with the Lease # on it, and if they decided in my favor, could rescind their deal with MPL and get their money back to cancel the lease. She said, if that were to happen, then they would have me send the Verifone back. So I didn't sent the Verifone back.
Tangie also said that MPL could honor the lease by returning their money and cancelling, but I would have to go back to them (MPL) and they would have to do it, but probably wouldn't.
6/6: Got letter from Discover Network, that I now had 2 accounts with them, they were closing one. I called them, told them to keep my original one open, close the new one (from MPI).
I wrote up the Letter of Misrepresentation for LFG, and mailed it together with the MPI cancellation letter at the end of the day, they postmarked 6/7.
6/13: Got the MPI Cancellation letter returned to me from the Post Office as Return to Sender: Not deliverable as addressed, Unable to Forward.
I also got a response from LFG, saying that they did not sell the equipment, nor do they provide the processing services. They just provide the funds to enable me to aquire and lease the Verifone, and my lease agreement is with them, I'm responsible for honoring it. The letter says No representative of the processing company is authorized to waive or alter any term or condition of the equipment lease. The salesperson is not negotiate the contract.... So while Mr. Lara made it seem like MPL was leasing me the Verifone, that they just use a leasing company to service the lease, in fact they sell the equipment to the Lease Company, and get people to sign a lease that is not even with them.
6/15: Found our CostCo/Nova account cancelled. I immediately called them and reopened it. Fortunately they didn't charge any fee for that. They also confirmed that the Verifone does not differentiate Master Money Debit Cards for purposes of discount rate/transaction fees charge to the merchant, unless the pin code keypad is used.
I called MPI Cust. Serv. to get the correct mail address for Cancellation Letter. I was put on hold for 7 mins. In the meantime, I went online and found their Corporate Offices address. The Cust. Serv. man came back on the phone, told me the sales rep would call me right back. I told him I didn't need to talk to the sales rep, and didn't want anyone trying to talk me out of cancelling, just to give me the correct address to send in the cancellation. He wouldn't give it to me. When I asked if the Corporate Office address was where I should send it, he indicated it was, without directly saying so. About 10 minutes later, Mr. Lara called me, and kept asking me why I wanted to cancel. I said I wrote it all on the cancellation letter and just wanted the address to send it. I asked him if the Corporate Office address was where I should send the cancellation letter, he wouldn't tell me, kept asking why I wanted to cancel. Three more times I asked for the address, he wouldn't give it to me, I hung up. I mailed the cancellation letter to the Corporate Office address I got online.
6/29: I went on the internet and Googled merchant processing complaints. I found numerous and similar complaints of fraud, scam, misinformation, entrapment, etc. relating to MPI, and other merchant service companies, on a the Rip-Off Report.com website, and an article at www.wweek.com. There were also statements by former employees (sales reps) for MPI, who quite because of the unethical business practices they were being trained to commit, and MPI's penchant for not paying them their commissions. I started realizing I was tricked and conned into signing up with MPI, and into this non-cancellable lease, just as many others have been. I found out the Verifone costs about $250-300 new.
7/6: I received a statement/bill from MPI dated 6/30, for Merchant Services for the month of June. Since there were no transactions made (except for the 4 tests when I first received the Verifone machine, for 16 each), they charged me a $25 minimum, and a $10 statement fee, for a total of $35.64. To that date, I had received no response to my cancellation letter. The account was not cancelled and closed. I tried calling MPI Cust. Serv., was on automatic hold for 15 minutes, didn't get through.
7/10: I called MPI Cust. Serv., talked to Justin. He told me the cancellation was not in the system yet. He FAX'd me a cancellation form and told me I could FAX it in, and it would be cancelled right away. I filled it out, signed it, and FAX'd it back to Diana Poirer, Cust. Care Rep, as it stated on the form, to facilitate account closure.
7/25: I called Diana Poirer, MPI Customer Care Rep, to see if she had put our cancellation in and closed the account. She said she got it, didn't say it was closed. After having read the other complaint reports online, and how they had been charged cancellation fees without knowing or having been told about it, I asked Diana if they were going to charge a cancellation fee. She said yes, $444 (plus some change). She said it was on the contract I signed. When I told her to that date I had never gotten copies of any of the paper work, sign-up sheets, contracts from them, and that Mr. Lara had told me there would not only be no cancellation fee, if I wasn't happy, but that they would even re-establish and pay any fee my Merchant Service company might charge. She just said she'd send me copies. She also told me that if I had sent the Verifone back to them, they would have just sent it back to me again. When I told her I wouldn't accept any more charges from MPI, that I had been trying to cancel since early June, she said that's my choice. They'll send creditors after me.
Finally, I'm hoping the Staff Member from Visa who routinely looks on this website will see this complaint and help me, as they did for the 2/26/06 (updated 6/5/06) Rip-Off Report by Darlene (Pigeon Forge, TN) about Wholesale Merchant Services, Inc. (an almost identicle situation).
Mr. Aaron Rian, President
Mr. Mike Greenlee, Managing Director
Ms. Shawna Meyer, Legal Counse
Diane Poirier, Customer Care Representative
Jorge Lara, Sales Representative (San Diego)
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