Bad Merchant Service Providers

With the increase in both face to face and internet sales using a debit or credit card, the amount of institutions offering merchant account services has increased. Unfortunately, not all of these institutions are completely upfront about how and when they charge their clients. In fact, there are some instances when these less than transparent practices can be considered fraud. In cases such as these, it may be necessary to file a formal complaint against the merchant account provider. This is not a step to be taken lightly. Any business considering filing a complaint should consider the following before putting pen to paper.

Attempt to Negotiate with the Merchant Account Provider

The first step is to contact the merchant account provider and attempt to negotiate the suspect charges down to an amount agreeable to both parties. Remember to maintain your composure during this part of the process. Your call will be recorded. Make sure that you are calm and collected when you speak with the account provider’s representative. Keep careful notes regarding who you spoke to, when you spoke, and what was said.

Read Your Contract Carefully

The terms of your agreement with your merchant account provider are spelled out in black and white in the contract. If you failed to thoroughly read your contract, that is not grounds for filing a complaint, but there are instances where account holders have been verbally misled as to the particulars of a contract. Make sure to read your contract to determine if you were misled, if the contract is unlawful, and if there are other discrepancies that increase the validity of your claim. If you cannot find anything to help your case, you are not out of luck. You still have options.

Negotiate Again

Once you have thoroughly read your contract, it is time to make another call to the merchant account provider. All the fees you have been charged may be allowed under the terms of the contract, but merchant account providers do not want to lose business. If you can show that you generate substantial revenue for the account provider, you may convince them to waive some of the fees and penalties. It is worth a try.

File a Complaint

In the case of unlawful or suspect practices; you must file a complaint with the appropriate agencies. Reviewing previous complaints filed with these agencies can help you determine if your merchant account provider has a bad history with their customers. The 4 agencies that deal with these types of complaints are listed below.

Better Business Bureau

While this is not a government agency and has no real power, it is a respected institution and companies take great pride in their BBB rating. In many cases, just the threat of filing a complaint with the BBB will reopen negotiations.

Acquiring Bank

Drafting a formal letter of complaint to the acquiring bank is your second step. The acquiring bank provides backing for the merchant account provider. There are very few providers that have the wherewithal to conduct business on their own. Obtaining the support of an acquiring bank is a long and expensive process. The last thing a merchant account provider wants to do is lose that sponsorship and too many complaints will do just that. If you can get an acquiring bank to take your side in a dispute your odds of having your fees waived or reduced increase.

Attorney General

The third agency to contact is your attorney general’s office. Keep in mind that the attorney general will only get involved if something unlawful is taking place. You must provide evidence that your merchant account provider is willfully engaging in fraud for the attorney general to step in.


Lastly, you can contact the Federal Trade Commission if you believe you have been the victim of a scam. This agency has immense power to penalize the merchant account provider. Only approach the FTC if you have solid evidence of fraud or dishonest practices. Most disputes with a merchant account provider can be resolved amicably. You should make every effort to negotiate with your provider, but if that does not work or you have been the victim of fraud, do not hesitate to contact the appropriate agencies.