Payment processor’s sales pitches tricked small business owners
Today, people expect to swipe, dip, tap, enter, and use their credit and debit cards everywhere — including at small businesses, local shops, and neighborhood restaurants. If you own a small business, you’ve probably gotten a sales pitch for payment processing services. As the FTC’s case against First American Payment Processing and its affiliates Eliot Management Group and Think Point Financial demonstrates, some of those sales pitches are misleading and violate the law.
According to the FTC’s lawsuit, First American tricked small business owners — including people with limited English proficiency — into signing lengthy and complicated payment processing contracts with hidden terms. The FTC says First American made baseless cost savings claims, often falsely claimed you could cancel at any time with no penalty, failed to reveal that the contract was actually a three-year agreement with a $495.00 early termination fee, and failed to disclose that the contract would automatically renew every year. To settle the case, First American will turn over $4.9 million to the FTC for refunds and agreed to change its practices.