As if small business owners don’t have enough to worry about, the Federal Trade Commission is now warning of possible scams related to credit card processing “deals.”
These days fewer consumers carry cash, with many opting to pay via debit or credit card. That means most small businesses often hire a third-party company to help them process these cards and payments.
It’s a big industry, one which can unfortunately be rife with unscrupulous operators. The FTC says scammers have been reaching out to businesses, promising them reduced rates on credit card processing equipment. They even claim the business can cancel their contract at any time.
While this option might appear attractive, the FTC says businesses often end up paying thousands to lease the equipment — gear they could have spent just hundreds to buy outright. The FTC says when a business owner tries to cancel the lease, they get no response. If they stop paying altogether, they can rack up expensive fines.
Better Business Bureau Northwest & Pacific knows this all too well. We work closely with reputable credit card processing companies and do our best to root out the bad guys. We urge business owners first to visit our website, BBB.org, to research a company before ever signing a contract.
Business owners should also keep this information in mind if solicited by a company of this nature:
Take your time. Scammers may often try to rush you into making a decision before you’ve reviewed all the information. If they use high pressure sales tactics, be extra cautious.
Do your research. Search the company’s name online with words like “scam” or “complaint.” Check to see if BBB has a record of them. If so, are they accredited? Do they have any outstanding complaints or negative reviews? You can learn a lot just by doing this simple search.
Get a contract and read it thoroughly. Never agree to anything before you get a contract in writing. Make sure you read the contract carefully before signing anything. When in doubt, have a lawyer check it out. Some small legal fees upfront can help save you from thousands in losses down the line.
If you’ve fallen victim to these sorts of shady business practices, help warn others by filing a report with BBB.org/ScamTracker.
— Stephen Mayer is the Better Business Bureau marketplace manager for Oregon. He can be reached at 971-201-8528 or firstname.lastname@example.org .