Merchant Direct Services Ongoing deceptive business practice. davison, Michigan

October 26, 2011

Dear Better Business Bureau, Federal Trade Commission, and Rip off Report:

I am writing this letter because I feel I was manipulated, intentionally misled and the victim of an ongoing deceptive business practice.

Rebecca Nienow, an account manager from Merchant Direct Services, came into our office in May 2009, promoting credit card processing.  She explained to my office manager, Coni Baden, and me that Merchant Direct Services offers a program that will cost our office $39.00 a month for processing credit cards. This program would cover (reimburse) our processing fees up to $2,000.00 a month through a time period of four years. The $39.00 a month would be deducted from the office business
account to cover the lease payment for the provided processing machine.  Additionally, American Bankcard, the actual card processing company, would automatically deduct their monthly charges from the office account as well.  Merchant Direct Services stated they would reimburse the charges (bundle rate) from American Bankcard service on a monthly basis for the four year duration. These terms seemed reasonable, and the overall charges were competitive with other credit card companies.  It was important for the business to update the credit card reader for security compliance and I entered into the agreement with Merchant Direct Services. 

The main reason for writing this letter is that Merchant Direct Services has attempted to change the terms of this program duration once, and now they are attempting it again.

Based on my experience, and the other Rip Off reports and information I have read, Merchant Direct Services does not disclose initially that the lease agreement is with a separate company and that it is non-cancelable for four years through logical lease.   

(This extra information is relevant because who would get into an agreement with one company for three years and another for four.)    I found out about Logical Lease after initiating business and information transfer with Merchant Direct Services. I
received a separate contract from Logical Lease in the mail.  I was immediately concerned when I saw the
four year irrevocable terms.  I contracted with Merchant Direct Services, not logical lease. This was not disclosed when I signed with Merchant Direct Services. I called and spoke with Erik, at Merchant Direct Services, who was my technical support contact. I told him I was apprehensive that this was a separate leasing company and their contract stated that it was non cancelable for the four year duration.  I was concerned, what would happen if Merchant Direct Services is not around for the 4 years. Erik reassured me that Merchant Direct Services has been in business for several years, and he has been with them for several years as well.

On September 25, 2010, I received a letter from Merchant Direct Services stating that they are no longer going to reimburse my bundle rate. They stated that they only offer this bundle rate reimbursement as a courtesy for one year to familiarize with the processing companies monthly fees. This was not disclosed when I signed. As mentioned, the contract was for four years. This was their first attempt to change their contract agreement. I called and spoke with Jamie Kaatz, to discuss the issue, and explained this is not what I signed up for. On October 8th, 2010, I received a letter from Merchant Direct Services explaining that they will continue to reimburse my bundle rate, through the end of my contract which they say is 6/4/1012; this is a three year period, not the original four. This was now their second attempt to change their contract agreement.

I signed up for this plan for four years.  (Once again, our Business would not enter into an agreement with one company for four years and another for three.)

At this point, I am frustrated with Merchant Direct Services. My reimbursements from them are up to four months behind, and unless I repeatedly call to check on status nothing is done to resolve this issue. 

My next step was that I contacted Logical Lease. I spoke with Beth Marie (I also spoke to her at the initial setup) and explained this deceptive situation to her. I asked her what she showed for my termination date with Logical Lease, which she told me was May of 2012, not the June, 2010 date, which the Merchant Direct Service letter stated. She reiterated that this lease is non-cancelable.  I then asked her questions regarding the procedures to follow for a smooth termination of my
contract. When I asked Beth Marie if she had known of any other problems or complaints with Merchant Direct Services, she said no.

If previous Rip Off reports and complaint information is researched, it is clear that Logical Lease is involved with these
complaints. 

My next concern with Merchant Direct Services is that they state you must be actively processing to receive reimbursement from them. Since Merchant Direct Services is not prompt with reimbursement, I am concerned that at the end of the contracted term with Merchant Direct Service, that there will be outstanding reimbursements due, and I will not receive them.

When my contract is truly up, and if they are months behind in reimbursement, will I end up forfeiting the reimbursement that they may still owe me?

At the writing of this letter, reimbursement was received from Merchant Direct Services. They are current with reimbursement at this time. However, contract duration is not resolved and timely reimbursement is still a concern.