Have you ever been scammed? Swindled? Conned? Or tricked?

It feels truly lousy to fall for a dishonest scheme, otherwise known as a fraud — a racket — a con. There’s likely a sick feeling in the pit of your stomach when you determine that a fraudster duped you. The feelings of guilt, shame, and anger can seem overwhelming.

 

When the ramifications take awhile to materialize it gets even worse. Like when the fraudster turns out to be your merchant account provider. You find out only when an outrageous bill arrives after completing your first month of credit card transaction processing.

Forget the promised low rates and transparent fee structure. Not true.

If you operate a high-risk business, you already feel vulnerable because of the stigma associated with that label. Finding a legitimate merchant account provider for your business was difficult enough without all of the scams out there in the payments industry.

So how can you avoid the merchant account scams and tricksters this time around and find the legitimate merchant account provider that’s right for your business?

New high-risk business owners and other merchants who need to change merchant account providers should heed the English proverb “forewarned is forearmed”. Let’s dissect a few egregious scams out there today, and some actions merchants can take to counter them.

Beware Merchant Account Scams

Merchant account scams are designed deliberately to fool you. The scam artists want you to spend money on faulty products or services that don’t exist and/or you don’t really need or want.

When considering options while searching for a legitimate merchant account provider, it pays to be aware of the numerous “merchant account scams” perpetrated by the cybercriminal underground.

Here are three examples:

  • Free merchant accounts: Smart business folks know that nothing is really free. While it may look tempting, the offer of “free merchant accounts” is one of the most common merchant account scams on the Internet. The goal is to lure merchants with clever words and other scam tactics. First, you’ll be asked to quickly provide financial information. Then you can register for services by paying a “refundable” startup fee. And then the bad guy takes the money and disappears. If it sounds too good to be true, it probably is… so don’t bite.
  • Cash Reward of $XXX if you find a better high-risk merchant account deal: A big scam in the industry, it sounds good (sort of like insurance). The problem is that you’re charged very high fees, and you have to execute a long-term contract (that may be presented as an application form). You can’t terminate it without a huge fee. And the “refund” is in the form of a credit to your account, not a cash payment as advertised.
  • Merchant services slamming scam: “Slamming” is an insidious professional scam that results in huge business losses. Scam phone calls (claiming to be from “merchant services”) attempt to gather personally identifiable information (PII) from unsuspecting merchants. The callers often claim to be representing the service or support department of a legitimate merchant account provider — even the recipient’s current service. They’ll claim your account’s been locked, and they need account information to unlock it. Or the scammer will ask you to sign an application form to get a price quote for a new service, but the form turns out to be a binding contract.

Space doesn’t allow a complete run-down of all the merchant account scams in play today. Many attempt to perpetrate merchant identity theft — so be sure any merchant service provider you deal with is properly accredited and recommended by past and current users.

Meanwhile, when you’re searching for a legitimate merchant account provider to support your business, beware of scam tactics. Search the Internet to study more examples than you’ll really want to know.

The bottom line is that fraudsters in the Internet era have no shame.

Embrace Legitimate Merchant Account Providers

The scam artists design their approaches to appeal to new merchants — especially those running high-risk ecommerce businesses. Rejoice that there are counter solutions offered by legitimate merchant account providers who work with high-risk merchants.

Use these guidelines to help you land the legitimate merchant account provider your business deserves:

  • Never provide personal or financial information on the telephone to someone you don’t know. If you receive a call from someone about your existing processing account, end the call and ring your known contact to ask for any account updates you may need. See these suggestions on dealing with “merchant services impersonators”.
  • Research carefully the merchant account processor you’re considering. Check payments industry blogs and social media sites for customer comments. Those who have been scammed or feel they’ve been treated unfairly won’t hesitate to write about their experiences. Read all the comments to assess what to expect with the processor.
  • Read every contract or agreement you’re asked to execute. Don’t sign anything without studying it first and getting all of your questions answered. If a vendor seems evasive or pushes you to act more quickly than is comfortable, walk away.
  • Never trust popup websites or sub-domain hosted e-commerce merchant service processor websites. Fraudsters often attach a subdomain name to a well-known URL like google.com (like www.google.com/merchantprocessornetwork). Don’t fall for it — they’ll disappear as quickly as summer ice.

Above all, use your good common sense. You’ll be better off working with a legitimate merchant account provider who specializes in high risk ecommerce processing. Choose an industry expert who has a solid reputation, and who’s been around a while.

The right processor understands your business model and helps you implement a payments process that meets your specific needs. And they’ll stick around as a business partner to help you succeed in your chosen high-risk ecommerce business, now and in the future.

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