• Report: #378400
Complaint Review:

First National Merchant Solutions

  • Submitted: Sat, October 04, 2008
  • Updated: Fri, January 30, 2009

  • Reported By:Chuluota Florida
First National Merchant Solutions
1620 Dodge Street Omaha, Nebraska U.S.A.

First National Merchant Solutions Longtime Customer "Rewarded" with 250.00 "Early Termination Fee" !! BEWARE!! owned and operated by First National Bank of Omaha, Omaha, Nebraska

*Consumer Suggestion: This auto renewal contract is standard

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We'll pay you 500.00 if we can't save you money! That's what First National Merchant Solutions says on their website www.firstnationalmerchants.com.

This company is owned and operated by First National Bank of Omaha, Omaha, Nebraska. I have been a customer of theirs since June of 2004 and they may promise to save their new clients money but I want you to know how poorly they treat their long time clients. Here's my history with this deceptive company:

When I needed a processing company for my online store on my website my fianc recommended First National Merchant Solutions as she had just signed with them and really felt good about their representative. He came and spoke with me and I agreed to also sign with First National on a 36 month contract. The representative explained there would be an early termination fee of 250.00 and I agreed to that. The first couple of years things went fine with my website sales and I had no problems with First National Merchant Solutions so when I decided to open a store front in February of 2006 I contacted them and found out that I could not just extend my account to the store front since it was an online processing accountI had to open another account with another 36 month contract. OK, if that's what we needed to do that was fine.

Things went well through 2006 but by January of 2007 my store front was not operating any longer ( I was still bound to 24 more months of service on my 36 month contract with First National Merchant Solutions) and the sales on my website had slowed dramatically. Four months during 2006 they were so low that I paid the minimum service fee of 33.00 and several other months the processing fees were just barely over the monthly minimum fee. In February of 2007 I contacted First National to see what we could do as I expected to eventually increase the sales on the website but at that time it didn't seem possible and I was in the situation of paying 33.00 per month on one account (I was already being billed 35.00 a month for my store account, since January of 2007)68.00 a month for not a dimes worth of processing taking place. Their representative was very nice and explained that there was no way to shorten the contract for my closed storefront but she could lower the monthly minimum on the website to 8.00 a month, quite a savings over 33.00. Since I had hopes of getting the website back up I accepted her offer. For the year 2007 there were 4 months that processing occurred and 8 months of inactivity. I paid First National Merchant Solutions 190.82 for this account and 420.00 for the store front account ( I realize now that I should have just paid the 250.00 early termination fee, as you will see..)

Things stayed the same through June of 2008, with me trying to get things up and running and paying the minimum fees each month. Then I get a letter stating that ALL accounts, dormant or not, will have a 35.00 minimum processing fee, with a 10.00 service fee, for a total of 45.00 per month. This comes to 90.00 per month for the two accounts, with NO PROCESSING !! I contacted the company and the person on the phone tells me We just had a meeting with the President this morning and he said No exceptions', so there is nothing I can do for you. After realizing I had no options, I decided to cancel the website account and just pay out the balance of the 36 months on my closed storefront account. I contacted First National Merchant Solutions and closed my original account (opened in June of 2004, the 36 month contract had been fulfilled in June of 2007 and it was now July of 2008). The representative was cold when I told him what I wanted to do but he followed my wishes. Imagine my surprise when I got my bank statement 2 weeks later and there was a 250.00 deduction from First National Merchant Solutions! Of course I contacted them and they informed me that in the contract I had signed it explained everything. Here are the exact words from their Terms and Conditions booklet, dated 2005:

Page 8, Section 4 TERM OF AGREEMENT

4.1 The initial term of the AGREEMENT shall be for three (3) years (INITIAL TERM) commencing on the date this AGREEMENT is executed by an authorized agent of FNBO.

4.2 At the expiration of the INITIAL TERM, this AGREEMENT will automatically renew for successive one (1) year periods (RENEWAL TERM) unless terminated as set out below.


5.1 This AGREEMENT may be terminated by FNBO at any time effective upon thirty (30) days written notice.

5.2 MERCHANT may terminate this AGREEMENT as follows:

A. Upon FNBO's default of any material obligation to MERCHANT thereunder and the failure of FNBO to cure such default within thirty (30) days after written notice of such default.
B. Upon written notice of non-renewal at least thirty (30) days prior to the commencement of any RENEWAL TERM.
C. On thirty (30) days notice of termination accompanied by payment to FNBO of the EARLY TERMINATION FEE (250.00).

So, what we have here, prospective clients of First National Merchant Solutions is not a 36 month contract at all, at least not as their sales representative pitched it. What we really have is this:

A 36 month contract which requires you, the client, to notify First National Merchant Solutions in writing of your desire to not renew your contract. This cannot be done by phone or by email, only by writing a letter to them. They must receive it at least 30 days BEFORE the renewal date of your contract (not 3 weeks or 2 weeks or 1 week, but at least 30 days prior). If, at the end of 36 months you cannot remember to do this exactly as laid out in the Terms and Conditions, YOU AUTOMATICALLY ARE TIED INTO ANOTHER 12 MONTH CONTRACT WHICH YOU CANNOT GET OUT OF WITHOUT PAYING 250.00. THIS WILL GO ON UNTIL YOU DIE UNLESS YOU FOLLOW THESE INSTRUCTIONS TO THE LETTER OR PAY THE 250.00IT IS NEVER ENDING, AS STATED IN THE TERMS AND CONDITIONS. First National Merchant Solutions can, of course, cancel your contract with them with written 30 day notice. Nice, huh?

This is how First National Merchant Solutions thanks their long time customers, those who fulfill their contractual obligations. They promise to pay new customers 500.00 and then shaft their loyal customers for 250.00 when they want to end their contract in good faith. Let me ask you this ( this is exactly what I asked their customer service rep and got no reply to my question):

Imagine the sales person pitching the company to a prospective client in this way:

The initial contract is for 36 months, but you don't have to worry about anything. First National Merchant Solutions is so confident in our services that we are not going to notify you at the end of the 36 month period to see if you might want to voluntarily renew, we are going to do it for you through a technicality in our contract and, don't worry, it's only going to cost you 250.00 if you want to get out of your contract after that, even though you thought the contract was for the 36 months I led you to believe.

Does anybody in their right mind think a prospective client would ever sign that contract?


Well, now you know how I feel about First National Merchant Solutions.

Chuluota, Florida

Chuluota, Florida

This report was posted on Ripoff Report on 10/04/2008 08:43 PM and is a permanent record located here: http://www.ripoffreport.com/reports/first-national-merchant-solutions/omaha-nebraska-68197/first-national-merchant-solutions-longtime-customer-rewarded-with-25000-early-terminat-378400. 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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#1 Consumer Suggestion

This auto renewal contract is standard

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

I work for one of the very few honest merchant service scompanies and I feel you and others should know, this is standard for all merhant services companies. To avoid this in the future a business owner can read the contract they are signing and ask questions. They can also ask to sign with no contract, most companies will waive the contract when asked, I do. Also, if we make a mistake I can get any fees waived. If a merchant goes out of business or just wants to switch we of course hold them to their contract. It is the same thing if I want to cancel other contracted services like my cell phone, or my satellite t.v., if I sign a contract I am responsible for it. I know nothing about this particular processor but I just thought you may want to know so the same sittuation does not occur. Also take into account that many times I save businesses hundreds of dollars a month, cutting my own profit. If the do have to pay a cancellation fee down two years down the road the more than made up for it 20 times in savings. If you have a low volume account, ask to be placeed on annual fee instead of monthly minimum. This is usually around $100.0 so it is much cheaper than the 25-30 a month. Statement fees are also standard and those who dont charge them are putting the charge elswhere like in the rate or trans fee. What matters is what is your bill at the end of the month. Is it lower than before.
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