My monetary damages are zero, because I did not fall for the scam. If I had agreed, my damages would have been $495 initially, plus $24.99 per month for as long as I stayed with the company. This is a classic pay-up-front-for-nonexistent-business-opportunity scheme.
Easy Street Merchants (ESM) cold-called me at my home phone, saying that I could make money by referring local businesses to them — name, address, and phone number — but that national chain businesses did not count. They would then contact the businesses to get them to change their credit-card processor to "Easy Street Merchants" which would offer them a flat 2% processing fee, considered to be a bargain. When businesses I had referred signed up with ESM, I would get a $500 one-time commission for EACH piece of credit card equipment that was signed up (e.G. A store with three cash registers would be worth $1500 one-time commission). Moving forward, I would get a 1% commission (which is HALF of what the company would be charging the merchant) for all activity processed. Apparently I would continue to receive the 1% indefinitely, or as long as the merchant remained a customer of ESM.
The plan was this:
1. I pay $495 up front for a "merchant ID number" (described as similar to an EIN) that comes from the Federal Trade Commission. Without this step, I cannot (legally) do this type of business.
2. I pay $24.99 per month for "website hosting." The purpose of the website is to enable me to track the activity on my account with ESM. I am allowed to cancel this arrangement at anytime, but after I cancel I will not be able to track the activity, so I would have no idea whether my one-time commission payments and 1% ongoing commmission payments are accurate. (Of course, even with the website access I still would not know whether ESM was falsifying the numbers, anyway.)
3. I would refer businesses to ESM by email.
4. When any business signed up with ESM, my commission money would start rolling in.
I reflected on all this as follows:
A. My first observation was that I would start to experience a gain when the FIRST of my referrals signed up with ESM.
B. My second observation was that the 1% ongoing commission rate seemed awfully high, since it reduced the earnings of ESM to 1% less their costs. It's hard to believe that they could offer me this much money.
C. My third observation was that ESM would probably reject most (or all) of my referrals as being companies that someone else had referred already. Even if this was not true, they could still say it was true.
D. My fourth observation was that the work ESM was asking me to do could be done via city directories and such at a much lower cost.
E. My fifth observation was that the $495 fee to the FTC was almost certainly fictitious. This money presumably would go into the pocket of the man who owned Easy Street Marketing.
F. My sixth observation was that there was essentially no reason for the $24.99 monthly "web hosting" fee. This too would go straight into the pocket of the owner of ESM.
G. My seventh observation was that credit card processing is a highly competitive business. If it can really be done for 1%, then someone else would already be doing it, and these various "local businesses" would already have found such deals. (I say 1% because that is all that ESM would net out of these deals, even if they charged the merchants 2%.) For that reason, even if everything else were true, it would be rare for ESM to get anyone to sign up.
To sum up, I can predict how this would go. I would pay $495 up front plus $24.99 per month, then "refer" a bunch of local businesses to ESM, and then nothing further would happen, except for various excuses from ESM about how my referrals were invalid because someone else had referred them first, or the companies had turned them down, etc.
So this would have been money spent by me for nothing.
Watch out for deals where you have to spend money up front.
— pH
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