Complaint Review: First National Merchant Solutions - Omaha Nebraska

I have been with FNMS since 11/04 as the credit card company for my small business. When I signed on with them, I was told by the sales rep of the 3 year contract that I would be held to, and the fee for early termination. I was led to believe that after your 3 years were up, you could cancel at any time without penalty. Here are the exact words from their Terms and Conditions , which, by the way, you do not receive until you've already signed on with them, in your welcome packet:

4. TERM OF AGREEMENT

4.1 The initial term of the AGREEMENT shall be for 3 years (INITIAL TERM") commencing on the date this AGREEMENT is executed by an authorized agent of FNBO.

4.2 At the expiration of the INITIAL TERM, this AGREEMENT will automatically renew for successive 1 year periods (RENEWAL TERM) unless terminated as set out below.

5. TERMINATION OF AGREEMENT:

5.1 This AGREEMENT may be terminated by FNBO at any time effective upon 30 days written notice.

5.2 MERCHANT may terminate this AGREEMENT as follows:

A. Upon FNBO's default of any material obligation to MERCHANT thereunder and the failure of FNBO to cure such default within 30 days after written notice of such default.

B. Upon written notice of non-renewal at least 30 days prior to the commencement of any RENEWAL TERM.

C. On 30 days notice of termination accompanied by payment to FNBO of the EARLY TERMINATION FEE (250.00).

So, after calling today to inquire about cancelling my account - because, after all, my 3 year "contract" has been "up" since 11/2007... I was told that "no, I am locked into another year until 11/2009". Basically I was told that for you to cancel, you must notify FNMS in writing to not renew your contract. The only time you can do this without paying an early termination fee of $250 is during your anniversary month (with a leeway of one month prior, and one month after). If you do not do cancel during that 90 day period annually, you automatically are bound into an additional 1 year contract that you cannot get out of unless you pay an early termination fee of $250.

Except for the INITIAL agreement, I never signed anything binding me to future years of my life. I have NEVER received a notice, a phone call, an email, a flyer - NOTHING - to verify with me that I wanted to stay on with them, nor reminding me that my "anniversary" month is upon us, to give me the option of continuing. They have NO SIGNATURE of mine to allocate these additional years of commitment.

The customer service person's answer: "There is nothing I can do. If you wish, you can write a letter to the FNMS President and they MAY allow you to cancel with no penalty".

There are 4 of us in the business I work out of. We are a small day spa, set up like a co-op, and none of us have the same "anniversary" date. After several previous conversations with various persons at FNMS, who all have been made aware of our unique multi-technician situation, NONE of them ever mentioned that we were all currently bound by renewal agreements. The last we were told was that when our Nail Technician was finished with her 3 year block in June 2009, that we could all cancel without penalty. So to find out today that isn't true, makes me truly feel that FNMS is using deceptive practices and misleading their customers.

L

Manchester, New Hampshire

U.S.A.