Vericomm - MBF Leasing - Ipayment - EZ Check Scammed into believing that our savings with their credit card processing company would cover the cost of our lease for new machine. ripoff Valencia California

Mr. Buffalo,

I believe that you are an American.  Correct?  Ok, then you speak and understand the english language well enough.

This Sales Rep from Vericomm came to your store and run some figures as you stated and then showed them to you. Correct?  After he or she showed you this process what did you do?  Let me guess you did not ask the question of how did they come to those numbers did you?

A rational business person would ask a simple question of the Sales person to quantify the numbers so you would have a since of reliability from what you were reviewing.  The report that the Sales person was showing was something called a cost analysis.  It takes information provided by you and does some calculations comparing the rates the Vericomm would charge you against the rates currently being charged by your provider.

If you did review the cost analysis report, you would see the side by side comparison between your current provider and Vericomm.  After you accepted the numbers shown to you in the comparison, the agreement would have those same percentages listed on the paperwork.  Any and all fees that you would have been charged for the service would had to be listed by law.  

So far you would have seen the percentages and all the fees to be charged to you monthly in the agreement.  The agreement is 4 pages long and you have to sign on all 4 pages.  There is also several areas within the agreement where your initials are required to make sure that you saw and read the document.  Now that we have passed the paperwork portion, then comes the installation.

After the equipment is installed, the leasing company will call you the merchant and confirm that the equipment is installed.  They will ask, "have you been trained on the equipment", " do you understand that this is a 48 month agreement?", " your payment per month for 48 month is $XX", and then  they will ask, " do you have any questions and do you understand everything that was said?"

During all of the aforementioned questioning, did you ever ask the relative question(s) about what you read and signed previous? Did it ever occur to you that mathematically 48 months is 4 years at the rate of $XX a month.  Simple math would have told what the total cost of the system would be and the leasing company would have gladly told you the cost of the agreement.  Did you ask the question of the leasing company during the confirmation of the installation?

When did you check the Internet for the cost of your equipment? Before or after the you signed the agreement documents? I would hope that you checked for that information before but, it seems that you did that after the fact.  It is not the fault of Vericomm, MBF Leasing or even the Sales Rep.  The blame my friend starts with you not doing your due diligence in verifying the information of what the Rep was pitching you prior to you signing the agreement.

You stated that the lease was for $160 a month and you did not do simple and multiply $160 by 48 months prior to signing the agreement?  The State Attorney General may cite you for not paying attention during the transaction.

As for Vericomm getting away with something, I fail to see what Vericomm was getting away with?


The Man

Daniel, your comments show that you no nothing about the merchant processing business. $12,000.00 per month in card volume is not large it is small. The fact that you do NOT list any details on how Vericomm will save you money shows that you are just another Vericomm rep who will try to convince any prospect that they can save $100.00 or more a month by requiring pin debit transaction processing. All the while you are just trying to mislead them into signing a inflated equipment lease ($4,000.00-$8,000.00) for equipment that can be purchased new for around $700.00. Vericomm is just another unethical sales organization period!

SORRY FOR YOUR BAD EXPERIENCE...as a rep for vericomm...we provide a discount rate to process credit debit cards...and we offer brand new equipment...
We have thousand and thousands of happy satisfied clients..
Our program works best when the clients is doing a large volume in credit card business....usually $3,000...a week minimum...in gross sales...equalling $12,000 a month...then the savings program makes clients happy cause they get to keep more money...they make more money...and everyone is happy....
However if you sales are less than $3,000...a week...less than $12,000...a month...then you may not be making more money...

Then just contact the main office...the phone number and email..is on the contract...and we will be happy to make arraigments...with you...contacting the rep....well...he may not be in business any more...so please...just contact the main office directly and they can help you..ok..thx.

Brent, You really should do your homework (and possibly brush up on your grammar) before you insert your foot unless you like the taste of your Nikes! Pay attention...1 First Data is a registered bank. (Your local Target store is also a registered bank even though you cannot deposit money with them) 2 RBS Lynk is also a bank (Royal Bank Of Scotland...uh duhhhhhh) 3 You really need to keep up on your studies on this one........Paymentech is a registered bank! Yes even before they were purchased by JP Morgan/Chase! You left out the 3rd largest processor that runs under the radar. NOVA (yes they are also a bank) they handle the majority of the banks across the US. 4 ISO's do not get their money from these folks in the same time frame as these guys earn interest on the ISO's porfolio on a daily basis. 5 Backend funding of all settled transactions are driven off eastern standard times as well as normal banking operational hours(it is called the federal reserve). If settled early enough and yes if your bank is your processor you can receive even same day (since the processor is the bank controlling the funding through the federal reserve) funds! 6 Both First Data and NOVA provide retail reps to all of their banking alliances (Chase is in the process) that are charged with the sales, installation, and training of all their clients. You are correct that all hardware is shipped from each companies deployment centers (GOOD JOB) 7 AND THIS IS THE BIGGEST ONE.....Since merchant services is a HUGE income stream for most if not all banks THEY DO KNOW WHAT YOUR TALKING ABOUT AND THEY DO TAKE CARE OF YOU!

1st the largest processor is First data, not a bank, however they do process for many banks and iso's including Wells fargo. Paymentech, RBSLynk, also in the top 10, are not banks. The only service that a bank can provide better than an iso is the one day funding, and that's only because they are loaning you the money overnight. They don't get the transaction proceeds any faster than an ISO but since you bank with them they front it to you overnight.

Even processing there own transactions, they can't do anything until merchants have batched out there terminals and sent the data, still takes 24 hours no matter who you are. Many ISO's can get merchants one day funding by simply opening a business account with the sponsering bank. Banks do not install terminals for merchants that desire that, there customer service consists of sending your broken terminal to them and waitng for it to be fixed and returned, ISO's provide overnight replacement normally. Try this, call your local bank and ask for merchant services, most will be confused and not even know what you are talking about.

Ana, your comments about banks and merchant processing they provide are wrong. The three largest processors in North America (the world for that matter)are banks! Your employer is probably utilizing one of them in one way or another and you dont even know it.

I take by reading your post that you are a commission only rep working for an ISO and that you mysteriously left out how you make 98% of your money.....You have to lease equipment and charge certain fees! The major processors/banks reps are paid on salary and do not have to sell these leases to get paid.

It is unfair and misleading for you to say banks charge too much when they give their customers benefits that your company nor any ISO cannot give! They are: 1. Better and faster customer support. 2. recourse on any problems. 3. Next business day funding (you ISO's cannot do this as you cannot control the funding process and you earn residuals your clients money) on their transactions.

Lastly, all Visa/MC costs (called Interchange and Assesments) are public information and posted for viewing by anyone! As a business owner it is up to me to negotiate and ask for the best cost based on these. I shopped, and was provided this information up front by the banks not the ISO's.

I am a sales rep for a credit card processing company not related to the one you guys have been discussing about. There are always signs that tell you there's something suspicious around there.

First of all, there are many more rates than the usual qualified, mid-qualified and non-qualified. It's almost safe to say that every single type of card has a different rate, so what most companies do is "group" them and then pick the most expensive type under the category and take it from there. If you are promised something like a 1.0% interest, beware! there is no such thing, the lowest visa/mc rate I know of is 1.28% and that's cost to the processing company, so if you hear the 1.0% most likely that means you will be charged the visa/mc discount applicable to the card PLUS 1.0% as profit to the processor, so you would actually be paying anything over 2.28%.

My advise is don't ask for "rate". If a rep comes to you offering you savings, ask them to show you how much money are they saving you on average per month, that way they cannot hide any fees or additional rates.

Also, it is normal that a company requires you to sign a contract. However, be very clear about the terms, specially the cancellation fee. A cancellation fee of $200-$500 is common, depending on the company. But make sure you read the small print, as I've seen some cancellation fees as high as $2,000, and I know some reps who have seen up to $10,000. And some companies claim they don't have a "contract", only an "agreement". However, that agreement specifies a cancellation fee, which indeed means that if you cancel the account after 20 years you still have to pay that cancellation fee. When it comes to contracts ALWAYS READ AND UNDERSTAND THE SMALL PRINT.

When it comes to equipment, look for machines manufactured by independent companies, such as Verifone and Hypercom, among others. Machines that are manufactured specifically for a particular processing company are often set so they cannot be reprogrammed, so in the long run you pay for a machine you cannot use if you switch processing companies. And don't be fooled about the prices.

The first company I worked for in the business made me think they sold machines at cost, prices were around $800 to $1300. However, with the company I am working for now I actually see the prices of the machines. And it ranges from $200 to $500. And forget about "free machines". Nothing is for free, and if they are giving it to you at no up-front cost you are very likely to pay triple the price in processing and cancellation fees, in addition to being obligated to return the machine or be charged thousands for it.

Processing through a bank seems like a smart solution to a lot of people. However, banks are not processors. All they do is team up with a processing company and provide them with customers. Of course, they charge for the endorsement. So you end up paying the processing company AND the bank, which boosts up your prices.

I would say the safest bet is to go with a reputable company. And make sure the rep you are dealing with is employed directly by the company, and not through an independent agency. Reps employed by the company are more supervised and have more guidelines to follow, since the company has to respond for them. Do your research on the company before you sign.

Look for authenticity signs like, for example, a company listed in the stock market. Or companies endorsed by well-known organizations. Check websites like this to see what kind of problems are customers encountering with the company, if any. Let the rep know what you found out, if he has something to hide, he will get scared and most likely will vanish. Finally, after you got your written proposal from the rep, call the company and ask for a quote from them directly. If the prices differ ask the rep why.

When it comes to the sales reps, pay attention to the way they approach you. Do they act like today is your only chance to switch? Do they tell you they have a special offer or gift if you sign up today? If so, be careful. Processing companies are not Macy's. They do not have such thing as one-day-only promotions. Specially when it comes to rates.

I would suggest never ever sign up on the first visit. If a rep is serious and honest, he/she will be used to come back for a second or even a third visit. Look for a rep who takes the time to listen to your questions and concerns and answers them clearly and honestly to the best of his/her ability, even if it means saying something you don't want to hear.

I see cases like you everyday. Nothing surprises me anymore. But there are still some good people in this business. Make sure you find one and then don't let it go, even if you are offered to process for free.


Good luck!


Ana

Dan was the victim of a very good sales pitch by the rep. If you look at their site and listen to the audio presentation about becoming a rep you will hear how they attract sales reps and a bit of how they make their reps think that what they are selling is nothing short of miraculous for business owners. They also paint the picture of very high commissions to the tune of 6 to 7 thousand per week!!

Reps are out selling customers on the idea that if they make all of there customers who pay with check/debit cards and use their pin numbers to complete the transaction they will save hundreds per month because check/debit are not charged a percentage by Visa/MC! This is mostly true. However the reps do not really go into great depth on the how debit transactions actually work and the costs associated with them. The merchant is charged a debit access charge of .65 plus another .15 (it could be higher) they also charge an additional monthly fee of $15.00! This option is useless if the customer is not present to swipe their card (you would not give your pin number to someone when you were ordering food for delivery) or if the customer does not want to use their pin number (which you the merchant CANNOT make them do) because they are afraid of identity theft! If you do the math the sale needs to be around $40.00 to 50.00 for the merchant to save money when the customer uses their pin number as opposed to running it as a credit card! Also, not all businesses can offer pin debit functions to their customers. Only true pay at the counter merchants can use this option.

The reps really overstate the 1.69% rate. They say that it is a wholesale or direct rate from Visa/MC! The real truth is that Visa/MC publish the rates that they offer to all processors nothing more. They really take advantage of the business owners that don't know any better. The 1.69% is only good for regular credit/check cards that are swiped through the terminal. If you have to manually enter the transaction (such as a phone order placed by your customer) you are charged 2.69%! If your customer happens to pay you with a Visa/MC business or corporate card you are charged (drum roll) 3.85%! And remember, you are charged a minimum of .25 every time you enter a transaction (this is a killer if you do more than 200 transactions per month).

The rep then tell you that you need new equipment to capture this savings. They do this by saying your equipment is out of date and is not capable of running new smart cards (smart cards are not used in the United States and won't be in our lifetime). They tell you that if you went out and purchased this equipment it would cost you 3-5 thousand dollars (around $1000.00 in the real world) and offer a lease for only 149.00 per month for usually 48 months! They tell you that your rate savings will cover this payment! What actually happens is the rep gets a check the very next day for around $2000.00 and his sales manager gets a check for $1500.00!! This is really the only way the rep makes any money. They are told to move on to the next prospect if they cannot close the sale with one call! Once you have signed that lease it is a done deal as it is non cancelable and can only be changed by the leasing company!

The best way to see if you are getting a good deal (and separating truth from fiction) is to ask the rep to put everything in a detailed proposal on company letterhead so that you can compare pricing (chances are that you will never see them again) and to leave a copy of the contracts with you so you can review them. Then call your bank and a third processing company and request the same. Never sign anything before you read it!!!

I know there are sales people out there that will say things that are not true just to get a deal done, Let's put that aside for now. What I would like to know is the facts.

How much in credit card sales do you do? At what rate where you charge per transaction? What was the Equipment Lease rate? Was it for all machines in your business or were you billed seperatly for each? One person had mentioned a ceiling for the 1.69 rate, what was the ceiling?
What was the rate you charged per trasaction for credit cards? What was the rate you where charged per transaction on debt cards?

The reason I ask these questions is that I have been approached by one of their reps. It only took a little quick math to figure that this would not work for our company because we only do 250K in credit card sales and our rate is 1.9%.

Based on the figures I was given, 169.00 per month and 1.69 percent for all transactions you would have to be selling in excess of 200K per year in Credit card sales to make it worth while to switch from a 3%, and 700K to switch from a 2% rate.

Now the sales people who lied about the cost of the machine, that's just wrong. It dosen't matter what the machine cost, why that was even stated makes no sense to me. The key is to get the 1.69 rate, if it costs 2028.00 a year to get it then that's what is costs, the catch should have been explained as just that, not some make belive price for tthe equipment. If you want the rate, you sign the lease, is how it should have been explained.

To target a small business for this service is wrong. It is like selling an industrial Combine to a farmer with 2 rows of corn. He will never be able to harvest enough to make the machine pay for itself.

Just so it's clear I don't work for this company, however I have owned a few businesses, what I am reading is anger, not fact.