Report: #1040643

Complaint Review: TransFirst - Aurora, Colorado 8001 Internet

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  • Reported By: PlaineOlJohn — McMinnville Oregon
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  • TransFirst 3131 S Vaughn Way, Suite 350 Internet United States of America

TransFirst Another merchant account horror story, Internet

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The internet is full of horror stories of merchant account providers resorting to slimy tactics that has unfortunately given the industry as much credibility as used car dealerships. My dealings with TransFirst is one more of those horror stories. In this report I will share how TransFirst has

-Unjustifiably chosen to hold over $300,000 of our companies money
-Done an incredibly poor job of paying attention to the details a multi-million dollar account costing both our company and TransFirst untold financial loss.
-Gross negligence and unprofessional business practices by one Cathy Billings of the credit and risk management department.

  A few short days after we opened for business we informed that our account had been frozen and we received the following letter.

 February 7, 2013
Attn: ....................
RE: Merchant Account

Mr. ..........
TransFirst processes the Visa, MasterCard and Discover transactions for your business, .............. TransFirst monitors all merchant accounts, transaction activity, authorization log activity, websites and marketing processes. Many concerns with the activity in these areas have surfaced with ............ account.

The original merchant application was approved to process credit card transactions at the monthly volume of $100,000. Within the first five days of February, the merchant account processed credit card transactions in excess of $310,000. TransFirst is not comfortable with processing sales on this merchant account at this volume level. The authorization log shows declines of sales at the level of twenty percent, this is excessive for any business model and outside the acceptable levels for processing with TransFirst. After thorough review of the above factors, TransFirst has decided it can no longer process the Visa, MasterCard and Discover transactions for ............. This merchant account will be closed immediately today February 7, 2013.

The current funds held, not settled to ............, total $315,541.55. TransFirst will continue to hold 100% of these funds for the next 90 days, and at that time will review the reserve for any releases to ......... We suggest you immediately investigate other credit card processing relationships that will allow the Visa, MasterCard and Discover sales.
Should you have any additional questions, feel free to contact me at (800) 654-9256 x8115.

Catherine A Billings
Director Credit Policy and Underwriting
TransFirst, LLC

 I simply thought that this was a misunderstanding as we were in regular communication with TransFirst with what to expect. In response I sent the following letter.

To whom it may concern:
My name is ................; I am the Founder and President of .............................. As a new company it has been very important for us to be thoughtful and careful
about the companies with which we do business. From software providers to legal counsel,we have taken the time necessary to interview multiple companies in order to ensure that we have confidence in each one. This has been especially the case with choosing a merchant account. Being in the direct sales/network marketing industry we have heard stories of merchant accounts which, for one reason or another, seem to avoid working with MLM companies. That being the case, I was happy to learn about TransFirst from ............, a respected consultant in the industry.

My main contact person from the beginning has been Brett Healy. He has been very helpful and professional in all of our dealings. Also from the beginning, it has been a goal of mine to be as open and transparent as possible with Brett and TransFirst because I know that clear communication is essential in an effective business relationship. So, in order to make sure that TransFirst would be comfortable, I let Brett know at the outset that we are an MLM company and that it is our goal to do a high volume of business. Brett assured me that TransFirst has serviced a number of MLM companies and that communication is the most important thing in moving forward. He mentioned that its important that TransFirst be aware of any spike of activity and that there are no surprises. I appreciated his response since communication is something that I highly value.

When I originally filled out the application I put down that we were expecting to start with $100,000 a month. At that time it was hard to tell what kind of volume to expect as we had not begun taking enrollments. During the application process TransFirst requested further information including a pro forma. By that time we had begun allowing people to pre-enroll for free and not be charged until the beginning of February, 2013, and therefore we had a better estimation of the kind of numbers we could expect and that we would be starting out at $300,000 a month. That is the number that we provided in the pro forma.

As the beginning of February drew near, our software provider asked if we were confident that our merchant account would be comfortable with such a high volume for a first batch.

Wanting to make sure that everything was fine I emailed Brett with my concern as early as January 21st. I updated him on our progress and informed him of the size of batch that we could expect. He said he was in dialogue with the risk department and that everything should be fine. He also said that it would be helpful to keep him informed of how things were moving forward as we began to submit the batch, which I did (if there is an interest in viewing any of the email correspondence, I would be more than happy to provide it).

In light of such open communication I was surprised and shocked to receive a letter this morning informing me that TransFirst has decided it can no longer process the Visa, MasterCard, and Discover transactions for Inspired Living. There were a few reasons that were given for this decision.

One was, The original merchant application was approved to process credit card transactions at the monthly volume of $100,000. While that is the case, as I have stated, I gave more complete and updated information in the pro forma so that TransFirst could make a decision based on better data. The amount provided in the pro forma was $300,000 a month.

Another reason given was, The authorization log shows declines of sales at the level of 20%, this is excessive for any business model and outside the acceptable levels for processing with TransFirst. While I can appreciate that this is a high volume it is what we had expected and what we had communicated. I will explain.

For the month of January we allowed people to pre-enroll for free and we informed them that they would not be charged until the beginning of February. That being the case we knew from the experience of other MLMs that there would be people who would join and, for one reason or another, fill out incorrect information. Usually when companies have free pre-enrollments the industry standard of people that carry over to be paying customers is around 20%. Even though that is the case we were hoping that we would be closer to 50%.

I communicated the following to Brett on January 21st, As you may know there is an industry standard when it comes to the conversion rate from free enrollments. Usually when there is a free pre-enrollment option the standard conversion rate is around 20%. While we know that there are people that did not put in their complete information we are still hoping for a much higher rate. Hopefully 50%. Well see. Having said that, right now we have 28,800. The revenue on that would be $286,560. We are currently adding between 1,000 and 1,500 a day.

Brett responded promptly as he usually does, OkJust be sure to communicate the size of the file/dollars to me in advance so I can alert the team to prevent surprises.

 It turns out that we ended up much higher at around 80% with 20% being declined. I will also let you know that much of the 20% who were declined was due to our AVS settings with Auth.net being too strict. Once we adjusted the settings many of the declines ended up going through. Now that the first batch has gone through we dont expect to continue to have such a high decline percentage. This was just expected with our first batch.

I communicate the information above with the hope of expressing our interest in continuing to do business with TransFirst. A good amount of time has been invested in this partnership, and it would be unfortunate to see it terminate when things have just begun. In addition, TransFirst is currently holding over $300,000 which has far reaching ramifications for any business just starting up. If there is anything that I can do or any further information that I can provide please feel free to contact me.

Even though we were careful to communicate what to expect and offered further clarification in our Pro Forma they chose to ignore us and hold 100% of our funds.

    It gets worse. Not only did they hold our funds but because the account was closed we were not able to refund people their money when they requested a refund (we have a 30 day refund). There were customers that were irate because they were not able to get a refund and there wasnt anything that I could do about it. Here is a record of the transactions on that matter. I made countless attempts to call Cathy and she simply would not return any of my calls (this has been a repeated pattern)

 On March 1 I sent the following email

Hello Cathy,
  There's the matter of the refunds that can not be processed do to the freezing of the account. It's VERY important that this is taken care of quickly as we have some people that have been waiting for a couple weeks to get a refund. Will you tell me when this has been addressed?

To which she responded,

The merchant account is shut down and no refunds can be processed.  The credits or refunds should be processed on the new merchant account for Inspired Living.
Thank you, Cathy
My response,
 WHAT?????!!!!!!!!! You have GOT to be kidding me Cathy. There has got to be something that can be done about this. You're telling me that our customers can not get refunds because TransFirst is holding their money? We have customers that have paid for something. YOU have there money. They want their money back and you won't give it to them?  If indeed that is the case than we will be left with no option than to advise our customers that TransFirst is fraudulently holding their money and they they should contact their credit card company and issue a charge back. Maybe I'm wrong here but I thought that you guys didn't like charge backs. Please tell me that there's something else that can be done about this. I should advise you that a record of our correspondence may be made available to the BBB, and online forums like ripoff report so that we can demonstrate to our customers that we have done everything that we can do for them and that it is TransFirst that is fraudulently holding their funds.

I usually hate using such language and threats but this had been going on for weeks and I hands were tied in my attempts to provide my customers with the service that they deserve. As much as I hat to use that language something finally started to happen.  

Cathy wrote,
Are you are asking TransFirst to turn your merchant account back on to process refunds only?  If that is the case, I am asking Brett how to allow this process to happen.
TransFirst is not holding your customers money, the funds TransFirst is holding is due to the excess transaction levels processed by ILA, outside the terms of the application that was submitted to TransFirst.  The merchant agreement does allow TransFirst to hold funds in situations such as this.
TransFirst in good faith released $75,000 yesterday.  Thank you, Cathy While It was helpful to have funds released it was VERY frustrating to hear that she still had the idea that we were outside the terms of the application. I responded,

First of all, yes that is what we are needing you to do.  We need TransFirst to unfreeze the accounts just for the purpose of refunding people.

Secondly, on the matter of why you closed the account, we've already gone over this.  In the application process, we provided a pro forma giving the projection of 300k a month.  Our volume should not have been a surprise to anyone.  You should have access to the pro forma that we submitted.

By that email and a conversation that we had on a conference call with other people at TransFirst it became abundantly clear that Cathy simply failed all along to understand what was going on. At one point she told me that TransFirst didnt feel comfortable releasing funds because as a company we still didnt have anything on the market that we were selling. I couldnt believe my ears. I had told her countless times that we had opened Feb. 1 and that we had tens of thousands of customers world wide and that we had 5 star reviews of our product online for anyone to see. One of the people from TransFirst that was on that call later told me that they were embarrassed because she clearly didnt know what was going on.  

   We were told at the time that the 75K had been released that the account would be reviewed in 30 days to release more funds. That was on March 28th. As you can imagine I wasnt very confident that would take place on schedule because nothing had gone as planned to this point. That being the case I made sure to be in dialogue before the 30 days to make sure that things were not held up. I sent the following email,

Hello Cathy,

  As you know, when you released 75k of our funds last month (Feb. 28th.) you said that you would revisit the account for further release of funds in 30 days which is coming up on Thursday the 28th. In the past you have mentioned a number of reasons that you have chosen to hold our funds which I would like to once again address as you revisit our account.

1. During one of our last conversations you said that you did not feel comfortable releasing the funds because you were under the impression that we were not actually open for business and that our application was not available yet. This came as a surprise to me because our application had been available since Feb. 1st. and is currently a 5 star rated app. in both the iPhone app store and the android market.

2. You also mentioned that we had gone over our limit. This actually had never been the case. It was always understood that the number of $100,000.00 that was on the original application was corrected and that we provided TransFirst more accurate numbers during the application process in our pro forma (which I have once again included in the attachment). The number that I submitted in the pro forma was a monthly volume of 300K. Not only did we fully disclose the amount but we were very detailed in our communication with TransFirst from the beginning of our processing as to what we were submitting in the first batch.  I have also attached a record of our correspondence documenting that communication (something that I have sent in the past but that I include again for your convenience).

3. It was communicated that there was concerns about the high number of declines and multiple attempts on cards.  Concerning the decline rate; we were aware and expecting there to be a high decline rate and communicated from the beginning that we expected it to be so and why we expected there to be a high decline rate. Once again I have included a document recording that correspondence for your convenience.  The multiple attempts on certain cards was certainly excessive. We researched the cause of that and corrected the situation immediately. I have also included the document that I have previously sent explaining our process and what we did to correct that.

   In light of the above information I request that the remaining balance of the funds that TransFirst is holding be released minus the 20% reserve that was a part of the original agreement. I trust that TransFirst will be able to honor our original agreement but in the event that our funds continue to be held all correspondence will be made a matter of public record with various internet resources and the better business bureau.

There was no response. The 30 days came and went and I have not heard anything. I called several days and left several messages and still nothing. Once again we were in the position of having to resort to contacting the BBB and other authorities just to get a response. On April 3rd we sent to following email,

To: Whom it may concern,

My name is ........ and I have been placed in charge of obtaining iLA's funds being held by Transfirst.  I have witnessed and have written proof of grievances against your company.  You have no reason other than obtaining interest in withholding iLA's funds.

First, ...... began taking transactions through Transfirst on Feb. 1st, 2013 and a few days later our funds of $315,000 was put on hold with the initial reason stating that iLA exceeded the limit of what funds were projected.  It has been pointed out a number of times that we provided a pro forma during the application process and that we were on track with the projected estimates communicated in that pro forma.

Another grievance that ..... has with Transfirst is that ..... was told by Transfirst that .... had no product.  From the very first day, Feb. 1st, 2013, .... launched our product and since then we have had over 40,000 satisfied customers that have purchased and downloaded ..... around the world.  Whoever was put in charge at Transfirst in regards to .... made no effort to substantiate their claims that ... had no product and seemed to look for any reason to withhold ..... funds.

The third violation, amidst others, is that Transfirst would revisit .... account after 30 days.  This was stated on Feb. 28th, 2013.  It is now 35 days after that date and 62 days that Transfirst has wrongfully put a hold on ..... funds.  For weeks several calls and an email have been completely ignored by Transfirst and I will no longer allow Transfirst to fraudulently hold on to ..... funds all the while collecting interest off of hundreds of thousands of dollars.

It is for these reasons and others (all of which ... has proof and documentation for) that Transfirst holding on to iLA's funds is excessive and perhaps a punitive abuse of power and because of this I will be filing complaints with the following agencies on April 5th, 2013 starting at 5 pm PST if Transfirst does not, before that time, state to ......., the President of ..., that they will release ALL of what is owed to ...:

(agencies that ... resides or has a business presence in)

The Oregon Department of Justice Consumer Protection

The California Office of the Attorney General

The Washington State Office of the Attorney General

The Florida Office of the Attorney General

The Arizona Office of the Attorney General

This is only 5 states that I have included in this email but iLA has customers in all 50 states that I will file a complaint in.


The United States Federal Reserve

The Better Business Bureau

The Securities and Exchange Commission

I will also be considering pressing charges with the police department for theft of services as well as contacting a lawyer regarding this matter.

All complaints and possibly charges will be filed online starting April 5th, 2013 at 5pm PST if ... does not receive confirmation from Transfirst that the funds have been released to ......  It will then be up to those agencies and authorities to determine if Transfirst is operating within the law, abusing power, etc.

Thank you for your time in looking into this matter

While it did generate a response it certainly wasnt a satisfying one,
I am referring this case to our legal team for review and discussion prior to additional releases of any reserves.  Attached again is the closure letter sent to ....  Thank you, Cathy
 Catherine A Billings
Director, Head of Credit Policy and Underwriting
TransFirst, LLC
12202 Airport Way Suite 100
Broomfield, CO  80021
Phone 303-625-8115
Fax 303-417-1021

Needless to say the frustration continues. I will continue to post as things unfold. In conclusion; if you are considering a merchant account to serve your business needs I highly discourage using TransFirst.

This report was posted on Ripoff Report on 04/04/2013 11:05 AM and is a permanent record located here: https://www.ripoffreport.com/reports/transfirst/internet/transfirst-another-merchant-account-horror-story-internet-1040643. 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. Ripoff Report has an exclusive license to this report. It may not be copied without the written permission of Ripoff Report. READ: Foreign websites steal our content

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