My wife and I operate a small startup business. We were having a hard time collecting from some customers and needed credit card capabilities fast. We're not sure how we got hooked up with iPayment. We had never heard of them and had no intention of doing business with them. We thought we were doing business with Intuit Merchant Services and were seeking a credit card processing solution that would interface with QuickBooks. We believe that a company owned by Intuit somehow got the sales lead, passed us off to another company, which passed us off to another company, which contacted us to install the credit card processing software. This company informed us that yet another company, iPayment, would be handling the actual processing. I tell you this so that you realize that you may end up doing business with iPayment without intending to do so.in fairness, I should add that a representative of Intuit denied that his company has any relationship with or knowledge of iPayment.
When we signed up for the credit card processing service, the salesperson quoted us attractive rates on credit card transactions and a low monthly service fee of $9.99. He also told us that there would be no contract and that we could cancel anytime.
Our first sign of trouble came when we tried to process our first credit card transaction with iPayment. It was a payment from one of our customers that was in the thousands of dollars. We received automatic confirmation through our processing software that the transaction had gone through just fine. Then days went by, and the money didn't show up in our bank account. I called iPayment and was told that they were unable to release the funds to us because the transaction amount exceeded our daily limit. We had never been informed of a daily limit. I was told that, to get the money, we would need to write them a letter verifying details of the transaction so that they would know it was legitimate. They asked me to enclose a copy of the customer's bill. I complied, faxing them a lengthy letter providing all the information they had asked for and more. After several days of waiting, we received a call from iPayment telling us they would need additional information to process the payment. Meanwhile, we were out thousands of dollars, something we as a small business couldn't afford.
While this was going on, I noticed that iPayment had charged our bank account for our first monthly payment. It wasn't $9.99 as promised. It was over $50. So I called iPayment to ask what was going on. They told me that under the terms of our three-year contract, we had agreed to pay charges such as a $30 "monthly minimum discount fee" and a $99.95 "annual fee" in addition to the monthly amount I had been quoted. I told the iPayment representative that we didn't have a contract and that we had been told originally that there wouldn't be one. He replied that we had indeed signed one. I asked for proof, and he faxed me the contract. I could tell immediately that the document was a forgery. On one of the signature lines, someone had signed the first letter of my wife's first name. She never signs her name like that, and very few people do. The other signature lines had our IP address printed on them. I pointed out to the iPayment representative that this so-called contract did not have a single legitimate signature on it. He responded that the IP addresses were "electronic signatures." I told him that was ridiculous because anyone could get our IP address and print it on any contract, but that wouldn't make the contract valid.
As a result of these unsavory practices, I informed iPayment that we would no longer be doing business with them. I was told that, under the contract, we would owe them a $350 termination fee. I contacted our financial institution, and they put a block on future transactions from iPayment. That appears to have stopped the $50 monthly deductions, but over a month later, I noticed that the $350 termination fee had gone through. I contacted our bank, and they said that iPayment had changed the name on the transaction slightly to get around our block. Fortunately, our bank seemed to understand that this was a scam and agreed to reverse the charge.
After our experiences, I would urge anyone to avoid doing business with iPayment. But don't take my word for it. Search for iPayment on the Better Business Bureau's Web site, and see why the Bureau recently revoked iPayment's BBB certification. Then do a Google search for iPayment. You'll quickly see that many other people have been defrauded by iPayment and that the business practices I described above are part of a pattern.
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