Complaint Review: CyberSource Corporation

I have been using CyberSource as my merchant processor for my website since 11/26/2008. I have never been particularly pleased with the obscure fees and lack of transparency in their monthly reports, but setting up a new merchant account is a tremendous burden.

In late January of 2011, however, is when the real problems began. I ran a large transaction ($39,000.00), which was flagged for review by their risk department. After they contacted me with their concerns, the transaction was reversed immediately by me. All requested documentation was provided to them.

They then proceeded to hold all of my Visa and MasterCard transactions for a period of approximately two weeks. When the funds were finally released, on February 4th, the amount they had held totaled $15,636.68. They had use of these funds during this period, and of course they are in a non interest-bearing account (i.e. they draw interest on the money, but I do not).

After this fiasco, I filed a BBB complaint against CyberSource. Amazingly, they have an A+ rating from the BBB, as does my company. 

When a response from them was received to the BBB complaint, I refused to accept their response and left the complaint open. This was on February 23rd, 2011.

Guess what? CyberSource again resumed withholding my funds, coincidentally on the same day that I refused to close my BBB complaint against them!

When I finally noticed that no funds were going into my bank account, I immediately contacted CyberSource to resolve the issue. This was on March 2nd, 2011. I was called back by Sandy (801-492-6468) in their Risk Department. After I pointed out to her that it was a very odd coincidence that they started withholding my funds again only after I refused to drop my BBB complaint, she informed me that my company presented a "high risk" to them and they were going to cease our relationship.

I also pointed out to her that my company has had no chargebacks during the entire period which I could pull a report from their website, from August 18th, 2009 to the current date. Didn't matter. I was told that we would be referred to their "High Risk Partner" to set up a merchant account. In other words, a Partner who would charge us much higher fees. Luckily, I had met with my Chase Business Banking Manager already, and my new account with Chase Paymentech will be set up within one day.

But get this, in the meantime CyberSource will be holding my funds, currently around $12,000, for 120 days! Of course, no interest will be paid on these funds. They also did not inform me that a hold was being placed; only after I contacted them did Sandy acknowledge that this was an "oversight" on their part, and would be handled internally. Yes, Sandy, I am quite sure you will handle this internally. We all know what that means.

Any small or medium-sized merchant reading this, beware! If you need a merchant processor, look elsewhere. CyberSource will overcharge you, make it extremely difficult to determine exactly what you are being charged, hold your funds for no legitimate reason, and cancel your account if you dare challenge them on their significant shortcomings.

See below for an exact copy of the email I received after discussing this with Sandy:

Dear CyberSource Merchant, CyberSource strives for excellence in customer service and appreciates the opportunity to be your credit card processor. Unfortunately CyberSource Corporation has made a business decision to terminate your account.  Your account will be terminated on 3/16/2011 giving you two weeks to get set up with a new processor. To help you to get set up with a new processor we forwarded your application to our High Risk partner you should receive an email from them. Termination of your use of the merchant account in no way impacts your access to, or use of the CyberSource - Authorize.Net Payment Gateway for credit card transactions. We will keep reserve on the account for a minimum of 120 days from last processing date. Please do not hesitate to contact me directly with any questions. Sincerely,  David Pahnke | Risk AnalystCyberSource Corporation 808 E. Utah Valley Drive | American Fork, UT 84003 
Tel 801.492.7001 | Fax 801.492.6462Risk Dept. 888.317.6935 Opt. 1risk@cybersource.com | www.cybersource.com 

Thanks to all for reading my admittedly long tirade, but CyberSource's evils cannot be summed up in one or two paragraphs.