Complaint Review: United Payment Services

This merchant's alegations are completely untrue and an outright lie. Our risk management department does not ask for documentation,om certain transactions, to sit on collected funds. We do this as an effort to verify certain transactions that are manually entered on a terminal or over the internet. This is standard operating procedure for all credit card processing companies and is NOT unique to United Payment Services. It is also not done on all transactions, just certain transactions that are red flagged by our system. This merchant received all monies owed and in a timely manner. This post is absurd.

Is this why your company helped yourself to $500 of my money in my checking account after I sent you a letter with the returned phone processor stating that you were not allowed to take any more money out of my account? You got that letter, I have the tracking to prove it. On Monday morning, you could have called me to discuss any concerns you had. Instead, you helped yourself to $500.

Scott, I'm not a huge company. I have a small soapmaking business, but I am supported by 300 of America's Soapmakers, right beside me, and we're waiting for you to do right by me, Lillian Newman of Fragrant Blossom Soaps.

Your company, when I CALLED IN, said that the unit had a crack on the back. I called WAY Systems in Massachusetts. Their president called me back! He was really nice. He said that the cost to refurbish that unit and the backing was $160. Not $500 Scott, but $160.

I do not believe it was cracked. My compromise with your company is to pay the $160, but not $500 Scott. Not $500.

I have disputed this with my bank, JP Morgan Chase and they agree with me. When you received the letter stating that you were not allowed to take any more funds, you were no longer authorized to do that. I am protected by Schedule E. I have done my homework.

I read this where you are saying you do your best to reach out to customers. How did you reach out to me, Scott? You took $500 out of my account without my permission! I allege you STOLE it! You had a letter where I asked you to never take money from my account and you did it. I called your company, and asked to speak to a manager and NO ONE CALLED ME BACK.

I will not sit with this. It is the principal of the thing and if I have to fight this all the way to court, be assured that I will. You simply can't do this to people.

I fully expect the refund of $500. you did not have permission to take it and now you must return it. I will compromise with you on the repair, but I will pay WAY Systems directly for that repair.

Scott, you and your company lost my trust when you went behind my back and took $500 out of my account without talking to me!

Lillian
Noblesville, IN

This merchant had an issue as some new merchants do. The issue was resolved right away and the merchant is still processing with United Payment Services and has been on board since 7/06. We try very hard to resolve all complaints and challenges. We have an "A" rating with the Better Business Bureau and strive to keep all customers satisfied and happy. We do not sit on anyone's funds ever. We do investigate certain transactions to prevent the company as well as the merchant from losing money due to fraudulent transactions. I hope all the readers realize that we resolved this issue, the merchant is happy and is still processing with us.

What you experienced is what's known as a "hold back". I have a lot of experience with these companies's and they can be very dishonest. But this practice of hold backs is just a security measure. When you as a business owner set up an account with a credit card processor they will ask you how much you are going to process, what your average sale amount will be, and what your highest sale would be. If you go over any of these parameters they hold the money until they can confirm that the transaction was legitimate. It should actually be a reassurance that the company is interested in protecting against fraud. The real complaint in this industry is those companies who do not disclose their fees, and when you finally get your statement you realize you are paying twice as much as you though you would.

All though a hold back may be inconvenient to you as a business owner, it should at least give you piece of mind that the company you are dealing with is concerned about prohibiting fraud. It's unfortunate that these practices need to take place, but as a card holder i am happy to know that if my card is stolen at least this company is watching out for me.

Take it from someone who has been on both sides of this argument.

Michael

Daniel-

Unless this transaction is being disputed by the actual cardholder, it sounds like you have been trapped by a typical trick - your merchant processor is able to "validate" any transaction that goes above a certain amount or any transactions that take place after a certain periodic volume is achieved. I would assume that these terms were in your merchant agreement (well hidden).

As the thousands of complaints on this website and others would indicate, there are more scams, tricks and outright liars in this industry than any I have ever been involved in. Hopefully, the following facts and pointers will be of some use. I will continue to list them on postings similar to this one as long as this website allows.

First off, it is important to understand how credit card processing actually works. Visa and MasterCard, the card associations, receive the majority of the fees that merchants pay for their processing services. The remainder of the fees, or the margin, is what the merchant processor receives. The card associations have designated over 240 different card categories that each merchant processor must recognize and process. Every merchant processor, no matter how big or small, is charged the same rates and fees by the card associations and every merchant processor differentiates each card category utilizing exactly the same card category name as designated by the card associations.

The card categories are designated in the following manner:
1.)Industry Retail, Restaurant, Hotel, Government, Utility, Service Industry, Gas Station, Supermarket, etc.

2.)Type of Card Personal Visa or MasterCard, Visa or MasterCard Debit, Visa Rewards, MasterCard World, Commercial Visa, Corporate MasterCard, etc.

3.)Method of Processing Face-to-Face (swipe), Mail Order/Telephone Order, Key Entered, E-Commerce, etc.

4.)Processing Efficiency Address Verification, Authorization/Settle Match, Timeliness of Settlement, etc.

To be clear, all of these cards are charged their own specific interchange rates. This is where it can get a little murky. Most merchant processors only disclose their "discount" rates and charge an additional fee for Visa and MasterCard rewards and corporate cards as well as other specialty cards that your clientele will use. Be sure to get all of the info you need to make an informed decision. The rate on which you need to focus is the net effective rate. To calculate your net effective rate, simply divide all the fees you are charged by your net credit card volume (sales less credits). Service providers typically charge an authorization and transaction fee, service fee and other miscellaneous fees in addition to a mark up on the interchange rate. Do not be misled by focusing on one line item - if you are being told about one rate and one rate only, you are not getting all of the information. Make sure any processor that you work with is able to give you 15-20 different association categories and associated rates and fees.

Additionally, watch out for the following practices that have the effect of increasing your net effective rate:

Minimum and maximum monthly feesavoid them! Watch for annual as well as monthly minimum and maximum fees.
Make sure you pay fees based on net sales (sales - credits = net sales) not gross sales! Or worst yet, Gross Plus! You should get the interchange fee back if you have to issue a credit to your customer!
You should receive your money within two business days, no longer!
Are fees taken at month end or on each deposit? Fees taken daily increase accounting complexity and increase your cost of funds.
Watch for other miscellaneous fees such as batch fees.
Don't buy new equipment if it isn't justified.

Service:
Credit Card acceptance is a volume businessthe more you process, the less you should pay. However, without a reliable service provider, you can end up paying considerably more then you should. Again, ask yourself the following questions:

Who watches to ensure my transactions qualify for the best rate?
Am I assigned to a specific relationship person or the next available operator?
How do I know when my volume qualifies me for a lower fee?

Equipment costs:
Be careful about being sold new equipment. If you process low volumes you may not need a terminal. Your telephone can be used to process and settle your transactions. Make sure you are not buying a private label terminal. Some processors sell terminals that only work with their software or need special codes to be reprogrammed. Leasing terminals for unreasonably high rates ($50 month and higher for three-four years) is another way unscrupulous providers can take advantage of unsuspecting business owners. The cost of the lease is almost always higher than buying the terminal. A business case may be made for new equipment if you do a lot of hand-keyed transactions and your current equipment is unable to submit all the data elements necessary to qualify for the lowest rate.

Contract Terms:
Be sure to look out for any minimum or maximum sales amounts.
Be aware that some vendors will try to lock you into long term processing contracts. This may be a good business practice if in return you are guaranteed their best price, with pricing changes tied directly to the published interchange rate, and you are pleased with the service from this company. Also be aware of the cost of terminating your relationship with a provider. If you were to close the account, determine ahead of time what the closing fees will be. To be safe, NEVER sign a merchant agreement when there is a term commitment on the day you are presented the information. Give yourself a day or two. Once you sign, you're in for the term.

Good Luck!