We are the victims of a deceptive white collar scam. I have been doing research on it, and have found out that this scam is as old as the hills...but it was new to us and some other businesses in the area. I am trying to find out if this is actually legal and if there is any recourse for us and our fellow businesses.
Tony Lux, Cuba City, WI, an agent for Vericomm, (Valentia, CA) came into our motel and literally made up a bunch of lies in order to get us to sign a lease for a POS terminal (used to swipe credit cards). He said he was representing Visa and that Visa started this company so that we could go direct and cut out the middle man with our processing, thereby saving a lot of money. He promised us a flat discount rate of 1.69% on the credit cards that we took and told us there would be no charge for taking debit cards. He promised us a lot of other stuff. He said that we would have to lease a terminal from his company because the software for the processing was only compatible with their equipment and also our terminal was obsolete. He said that his new terminal was state of the art and could automatically take the new credit cards that are coming out in the near future. He also said that the new POS terminal could automatically distinquish between debit cards and credit cards and therefore we would save a ton of money with that alone. He ran some figures and showed that we would save between $150 and $300 dollars a month with the new discount rates and that would more than pay for the lease and we would still have money left over to put in our pocket. And then after the lease was up, we would have all of the savings.
To make a long story short, we signed the lease and signed up for credit card processing, only to find out that it was all a lie. We are stuck with a lease for a POS terminal that is only worth $259 (and doesn't do what he said) and we are paying over $124 a month for 48 months which will end up costing us over $6000 before all is said and done. The rate of 1.69% is only for qualified credit cards, and the other rates were all higher. Also, there were fees and charges added on that he did not disclose to us when I signed the lease.
We are not alone as he has suckered other small businesses in this area into signing this ripoff lease and he is STILL out there suckering more hard working small business owners.
I understand that Vericomm is a big business, but someone has to stop them from allowing this to happen all over the country to unsuspecting business owners.
Vericomm told me that they are going to fire Tony Lux for the things he said and did, but the Vericomm company themselves are the ones who are using MBF Leasing as one of their leasing agencies. Even though they know how exhorbitant the cost is (equipment with a value of $200 to $300 being leased for $6000...talk about price gouging!) but yet they continue to send their agents out to sell this package (I-Payment Processing and MBF Leasing).
Vericomm also offered to pay for three of the monthly payments to MBF Leasing because they said they were sorry that I got lied to and mislead by Tony Lux. I would love to know what commission, if any, they received from MBF Leasing for our contract. I'm guessing it was a pretty good one if they are offering to give me around $370 back. I really am skeptical as to whether or not he will get fired. I really don't think so as he is making them a lot of money and that is their whole goal... BIG BUCKS!
As for I-Payment, Daniel, an employee of theirs, told me that I could cancel my agreement with them and switch to a different processor because he understood how I felt and he said that he was sorry this happened to us. But he also offered me a better deal on the rates than I had but not even close to the deal that we thought we were getting when Tony told us about it. I did tell Daniel that I really didn't know if I wanted to associate with a company that would associate with Vericomm, who hired Tony and allows their agents to rip off hard working small business owners with overpriced and outrageous lease contracts.
As for MBF Leasing, I called them and asked about the contract and they said it was noncanellable.
I have hired an attorney to look into this whole mess for me. I'm not sure what I can do. I've never had to go through anything so awful in my life. Being scammed, makes a person feel really stupid, and degraded. I can really feel for all the other people who put their testimonies on this website. We are honest,hard-working, kind, generous, trusting people who were caught off guard during a hectic, busy time of year. It was all cold and calculated on Tony's part. Hind sight is 20/20.
I believe there is strength in numbers. I have contacted two Sheriff's departments, the Lodging Associations, two Chambers of Commerce, the Federal Trade Commission (FTC), the attorney generals offices in four states, several newspapers,and individual businesses, etc. I really want to get the word out. I would love to stop Tony in his tracks.
My last words will be to urge anyone who has been the victims of a similar scam to PLEASE, PLEASE, PLEASE,come forward with your story. If not here, at least call or write to the FTC and the attorney general's consumer division. This is very widespread and if we complain enough, maybe we can get some laws in place to keep this from happening in the future. It really is a tragic, all-consuming experience!