I entered into a three year contract with Merchant Data Systems to process credit cards for my online retailer. For fiscal reasons, 2.5 years into the contract I decided it was not in our interest to continue with Merchant Data Systems and called the company to cancel the contract. I spoke to one of their qualified representatives in their cancellation department who informed me that if I were to cancel prior to the full completion of the three year contract, I would incur a Penalty fee of $250 and I was advised that in order to avoid that fee, I should call just prior to the end of the three year term to prevent it from auto renewing into a new three year term. As a result, I failed to cancel the contract with 60 days written notice as stipulated in the contract, and instead attempted to cancel by phone in late February, as advised by their qualified
representative. At this point I was told that it was too late and I would be charged a $750 dollar penalty for terminating the new three year term early and that there was absolutely nothing they could do, even if I was misled by one of their representatives. I asked to speak to the manager, who clearly had no idea as to what the terms of the contract stipulated and instead again misinformed me about what the termination fees would be and when they would be incurred. I tried every possible approach to find a suitable agreement wherein everyone would benefit, yet they were adament that I was locked into their new contract and that I would have to pay the ridiculous fee. Apparently it is common practice in their office to deceive their customers into renewing their contracts, because online merchants are quickly realizing that there are much
better processing companies that are actually transparent in their fees and contracts. Even if the contract does require a 60 day cancellation notice, this boilerplate clause is buried in a 24 page document they have you sign without an attorney's guidance. They should at least take responsibility for their employees misleading and negligent statements. Instead, even though they claim that cancellations must be written, I was charged $750, without notice, as they later claimed that they assumed I was cancelling after our phone conversations. So apparently you can cancel over the phone, so long as they can rip you off. I don't know if anything will come from filing this report, but most importantly I want other merchants, potential customers, to be advised as to Merchant Data Systems misleading practices. Stay away at all costs. There are plenty of other providers with much more transparency in their agreements. This company has multiple fees for arbitrary services with little to no disclosure(they even charge you 10 dollars for the statement).
We have had a similar experience and want to know if you resolved this. It appears this is a common proactice of MDS, and I am contacting all people who have had similar experiences for a possible class action suit and FTC investigation.
Merchant Data Systems Reviews
I entered into a three year contract with Merchant Data Systems to process credit cards for my online retailer. For fiscal reasons, 2.5 years into the contract I decided it was not in our interest to continue with Merchant Data Systems and called the company to cancel the contract. I spoke to one of their qualified representatives in their cancellation department who informed me that if I were to cancel prior to the full completion of the three year contract, I would incur a Penalty fee of $250 and I was advised that in order to avoid that fee, I should call just prior to the end of the three year term to prevent it from auto renewing into a new three year term. As a result, I failed to cancel the contract with 60 days written notice as stipulated in the contract, and instead attempted to cancel by phone in late February, as advised by their qualified
representative. At this point I was told that it was too late and I would be charged a $750 dollar penalty for terminating the new three year term early and that there was absolutely nothing they could do, even if I was misled by one of their representatives. I asked to speak to the manager, who clearly had no idea as to what the terms of the contract stipulated and instead again misinformed me about what the termination fees would be and when they would be incurred. I tried every possible approach to find a suitable agreement wherein everyone would benefit, yet they were adament that I was locked into their new contract and that I would have to pay the ridiculous fee. Apparently it is common practice in their office to deceive their customers into renewing their contracts, because online merchants are quickly realizing that there are much
better processing companies that are actually transparent in their fees and contracts. Even if the contract does require a 60 day cancellation notice, this boilerplate clause is buried in a 24 page document they have you sign without an attorney's guidance. They should at least take responsibility for their employees misleading and negligent statements. Instead, even though they claim that cancellations must be written, I was charged $750, without notice, as they later claimed that they assumed I was cancelling after our phone conversations. So apparently you can cancel over the phone, so long as they can rip you off. I don't know if anything will come from filing this report, but most importantly I want other merchants, potential customers, to be advised as to Merchant Data Systems misleading practices. Stay away at all costs. There are plenty of other providers with much more transparency in their agreements. This company has multiple fees for arbitrary services with little to no disclosure(they even charge you 10 dollars for the statement).
Did you resolve
We have had a similar experience and want to know if you resolved this. It appears this is a common proactice of MDS, and I am contacting all people who have had similar experiences for a possible class action suit and FTC investigation.