My business was using Cardservice International for credit card merchant processing and was paying 1.49% for qualified transactions, 2.34% for mid-qualified transactions and 3.14% for non-qualified transactions. NPMG solicited our business, analyzed our processing costs and determined that we were qualifed for their National Wholesale Program, which they presented as a flat rate of 1.57% for all credit card transactions. This was presented to us in a written proposal entitled "Bankard Consultation" which projected annual savings of $4,200 from the flat Wholesale rate of 1.57%.
NPMG required that we lease their terminal equipment (Verifone Omni 3750) for $89.67 per month. NPMG claimed that this equipment could identify debit cards and provide additional annual savings of $4,200 because debit card rates for us are much less than credit card rates because our average transaction is $500. NPMG claimed they could not support the terminal equipment that we had purchased from Cardservice International for approximately $350.
NPMG claimed they could lower our average rate for all credit card and debit card transactions to 1.2619% from the average rate of 1.9692% that we had paid Cardservice International in September — an annual savings of $7,478, including the cost of the terminal equipment.
We signed their agreements on the same day as the Bankard Consultation.in the agreements that we signed, the 1.57% rate was prominently displayed.
Two weeks later, a training session was conducted by telephone in which their technical rep admitted that their equipment could not identify debit cards. This eliminated 50% of NPMG's claimed savings.
In the first monthly statement, NPMG charged us 1.57% for qualified transactions, 3.5% for mid-qualified transactions and 3.79% for non-qualified transaction. Our average rate for all NPMG processed transactions was 2.17%, plus $89.67 per month for the terminal equipment. This was totally inconsistent with NPMG commitments in the Bankard Consultation, and indicated that NPMG processing costs exceeded those of Cardservice International.
We called our NPMG "Account Executive" - Jon Cannon, several times. He refused to return our call. A customer service representative finally returned our call and advised us that fine print in one of their agreements authorizes NPMG to charge 1.57% 1.69% (3.26%) for non-swiped, mail order, telephone order, electronic commerce and business transactions. She further advised us that the Account Executive and his superiors do not take calls from customers.
We advised the customer service representative that we had a commitment from NPMG for a flat rate of 1.57%, that we had been deceived by their fraudulent bait-and-switch practices and that we should terminate the agreements between the two companies. We were advised that we could terminate the processing agreement with a penalty of approximately $1,000 but we could not terminate the 48 month lease for the equipment because a third party (CIT) is involved.
We called CIT to discuss this matter. They do not answer or return calls.
We submitted our complaint to the corporate offices of Chase Manhattan Bank because NPMG is a "registered ISO/MSP of Chase Manhattan Bank". After one week we had not heard from the corporate office. We called them and they advised us that they had referred our complaint to their Merchant Services organization. We have not heard from either the corporate office or Merchant Services in the last two weeks.
The ethical resolution fo this matter would be for NPMG to release our business from all agreements, including the equipment lease and authorize return of the equipment. These agreements were based on fraudulent representations of the NPMG Bankard Consultation presented to us immediately preceding the signing of the agreements and deceptive presentation of the rates in the agreements.
EdwardSoquel, California
U.S.A.
0 comments