Avoid A Scam That Could Harm Your Business

If you're like me then you don't enjoy paying more than you should for anything. You're a bit of a bargain hunter. You're thrifty. You want to pay a fair price for the products and services you use and you don't want to be swindled out of your hard earned money. I think it's safe to say that we all have these traits in common.

With that in mind, I would like to alert you to a scam that is becoming rampant in the credit card processing industry. It's a little maneuver I like to call the "lease bait and switch" Here's a play by play:

A sales representative from a credit card processing company approaches you and promises you savings that seem unrealistic, but understandably catches your attention. During their sales presentation the conversation invariably turns to your processing equipment. At this point they claim that your equipment is out of date, out of compliance, or simply won't work on their platform, which means that you'll need new equipment if you want those "savings" that they promised you. Conveniently they have the equipment you'll need, and all for the low-low price of a non-cancellable lease.

This is where it gets really interesting. You see, the monthly lease on equipment could be anywhere from $60 to $100 per month and typically extends from 36 to 48 months. ($4,800 for a terminal, what a bargain!). Not only that, you may not even have the option to own the equipment at the end of the lease! Add to this the fact that you will most likely not save any money on your processing program and, as reports have indicated, your sales rep may pull a disappearing act leaving you in the lurch. All of this adds up to an incredible amount of money, time and energy being thrown away on equipment that you probably did not need to begin with. This, my friends, is not consistent with your spendthrift nature.

As we mentioned in a previous post (see To Rent, Lease or Buy), leasing is not an inherently bad option, so long as the terms of the lease are reasonable and fully disclosed. To avoid being scammed into a harmful lease and the unfavorable processing agreement that goes with it, here are a few tips:

• Be wary of savings estimates that seem unrealistic. Demand a detailed, side by side cost comparison.
• Contact your current vendor and investigate any claims concerning your equipment and the validity of any quote you receive.
• Avoid signing anything until the terms have been thoroughly explained. If you are presented with a one page application there are likely several other pages of fine print that go with it.
• Investigate the company that they represent - both for processing and equipment leasing. You can even check them out on the ripoff report.

Sales reps using this tactic are out there, so be prepared. Don't get caught paying thousands for equipment you don't need or get stuck in a processing agreement you don't want. If you would like to investigate improvements to your credit card processing program with a company that you can trust, contact us. We are always happy to help.