There are many complaints here about the unannounced $150 "PCI Compliance Fee" that Pipeline Data charged to the bank accounts of their merchants.
Pipeline claims to have announced the fee in a November mailing, but we never received the mailing. We did not receive an email announcement either. This is a violation of Regulation E Section 205.8 - failure to provide notice of Change-in-Terms 21 days or more prior to the change.
The $150 fee does NOT show up on the December statement from Pipeline. This is a violation of Federal regulation E Section 205.9 - Monthly statements must be issued describing types of electronic funds transfers, dates and amounts, and "other information."
Other relevant information:
- The customer service manager at Merchant Express (one of many ISO's who work with Pipeline) describes this unexpected "Fee" as the biggest disaster she's seen in her 11 years in this business. She says that 60% of her Pipeline clients have filed complaints about the fee, and most are leaving Pipeline. She says that Pipeline has the highest cancellation fee she's ever seen in the business. If you haven't been with Pipeline for atleast three years, they will charge you a $300 cancellation fee.
- According to employees at Transparent Financial Services and also at Merchant Express, the authorize.net gateway is already PCI compliant. The PCI compliance issue Pipeline is claiming to address can be satisfied by mailing a questionaaire to each merchant asking a series of questions about how they handle and store credit card data. A reasonable fee for this service might be $10 per merchant. Not $150. Many providers are not charging their merchants any fee for this questionnaire.
- According the an SEC filing dated 11/18 (available on the Pipeline website), Pipeline is dying. Quote: "... However, the Company has incurred significant losses and has an accumulated deficit of $11.6 million at September 30, with a history of quarter losses since December. The Company has a net loss of $3.1million for the three month period ended September 30, partially as a result of a major creditor filing bankruptcy causing a write down of over $1.0 million in notes receivable. These losses have reduced working capital and retained earnings to the extent that the company may not be able to continue as a going concern."
Why charge merchants $150 each when you know you're going out of business?
I called my bank branch. I talked with the manager for 4 minutes. I described all of the information above, plus i mentioned the series of comlaints on usacomplaints.com (she was already familiar with this website!).
She said she would commence a "Reg E" filing immediately, and I should have paperwork to sign within 2 days.
If Pipeline data really does have over 30000 merchant accounts, they just stole over 4.5 million dollars from us. Don't let Pipeline management "retire" with your $150. Call your bank today!
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