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Merchant Warehouse - First Data - Aida Marr - Anthony Latino Merchant Warehouse along with their counterpart First Data siezed over $67,000 and crippled my small family owed business Boston Massachusetts
After the death of my son's father last May, my son's and I decided to resume the business that they had grown up in and had worked in since their teens. Because it was a sudden death and he unfortunately didn't leave his son's in a position to just take over, we had to scramble to start a new company, hence a new merchant account.
Unfortunately, one of my boys came across Merchant Warehouse. After being in business for 6 mos. all of a sudden they siezed funds from my account in the middle of our largest show to the t
une of $63,000. The reason they said was because we were "a risk". We then had to spend the next 5 m0s. jumping through hoops faxing reports, turning over customer documents, basically assuring them that we were a legitimate company. They released in dribs and drabs all but $20,000 over a period of 5 mos. After all was said and done they said we had passed our test and assured us that we would never have to go through anything like this again ! Well, foolish us! 3 weeks ago, in the middle of our 2nd busiest show....$47,000 plus disapeared from our deposits!!! This time, they have decided that we are a risk and they are keeping our money! In one year's time we had only one chargeback, which got resolved, the customer is very happy with his purchase. The only difference between this time and last time is we can't hold on. That $47,000 plus (plus the $20,000 that they are still holding) is going to wipe us out. We have no merchant anymore, we have show contracts that we nrrd to honor, we have customer product that needs to be paid for so that we can deliver the product that we took their money from in good faith.
First Data is the "risk management" team that we have been crippled by. I asked Aida Marr, the representative that I had to fax 90 pages of documents to, what I was supposed to do...she said "get yourself another merchant"!! I said that she had stolen not only our money, but our customer's money...she said it was not her fault that our company did not have a big enough bank account to continue on with our business!! I'd like to know what types of small business' out there could survive having a total of over $100,000 being taken away from them in just a years time. She said she would review our company in 6 mos. from now to see about the $67,000 plus that they are currently holding to talk about the possible release of those funds. 6 mos from now there won't be any more company, we will be in huge debt, our credit ruined, and my son's father's business that he and I started in the early 70's will be nothing but a sad memory.
These companies that have ruined my life must be stopped from ruining other people's lives. In this economy today, with all the bank bailouts and giant corporation bailouts...is anyone paying attention to what they are doing to small business behind closed doors? I begged them not to do this to us and I could hear the sarcasm in her voice as she said "too bad, you've created this situation yourselves" how can she sleep at night? If anyone out there has any advice I would love to hear it. As I'm sure is part of their plan, we don't even have any money to hire a lawyer at this point. Thank you for any advise that may be offered...We need help, desperately.
Cyndi
holderness, New Hampshire
U.S.A.
2 Updates & Rebuttals
David
Las Vegas,Nevada,
U.S.A.
Yes, it's legal, but avoidable
#3Consumer Suggestion
Sat, March 28, 2009
It sounds like you have a seasonal business where maybe some months you might do a couple thousand bucks and other months might be $50K. If you were approved to do $5000/mo and you run a $50K month, you might have exceeded what First Data detemined was your ability to personally cover losses in the event your business closed and left customers wanting their money back.
There are ways to avoid a reserve account situation...
1) Choose a payment processor with enough capital of its own that it can sustain and support its own risk. And ensure it is owned by a respected bank that is also known to be strong. For example, Elavon (formerly Nova) does a couple hundred billion in transaction revenue each year and is owned by US Bank which is one of the strongest banks in the world (no sub-prime or derivative asset issues like other banks did).
2) Ensure that when you are approved, you know what your parameters are. What is the highest sale they are allowing and what is the monthly cap on your volume.
3) Find out what the steps are you would need to take to increase those caps in the event your business either had a once-in-a-lifetime individual sale of, say $10,000 if your average sale is typically $100, or if your business suddenly skyrockets. Usually you just need to call customer service and advise them of the new situation so they can re-underwrite the account and give you more room.
If you change the type of business, product offerings, customer type (wholesale B2B vs retail), structure, or other material change to the original basis for your account approval and don't advise the other party to your contract, you've violated your terms of service by not keeping everyone on the same page and you've placed yourself, your customers, your processor, and at least 2 banks in the position of seeing heavy potential losses. That is the ONLY reason why a processor would follow the guidlines set forth by the associations for risk management by withholding funds until it can be determined the risk of losses is alleviated.
Cyndi
holderness,New Hampshire,
U.S.A.
first data melville, n.y.
#3Author of original report
Thu, March 26, 2009
I just received my first official notice from first data since they seized my money (67,879.83) on March 5, 2009. It is dated March 24, 2009. As I stated in my original report they made us jump through hoops (like faxing 90 pages of documents after faxing me 3 pieces of paper that had 127 transactions that I was required to find the customer's information by their credit card numbers..pull their files and fax it back to them. They were arranged on their end by highest amounts charged to lowest...not by dates, and no names to go by...127 transactions. I did all this (it took 3 days to sort it out) and when I went to fax the 90 pages, Ada Marr the representitive "was on vacation". So it went to someone named Daniel Cortez to play with till she got back. Anyway, my new letter states that I am terminated and my money will be put in a "reserve" account that will be held to secure "the trailing obligations that you have to fund chargebacks and other items that MAY occur." My company as I stated had 1 chargeback in a years time and it got resolved happily. The letter ends with " it should be held for a period of less than 10 months". I ask anyone out there....is this legal? This to me is blantant thievery...how can this happen...these people have destroyed everything we have worked for...what kind of lesson does this send to my son's about their future? By the way, verbally they were holding my money for 6 mos. now in writing it has grown to 10 months. What else can they do to us?