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This is a cautionary tale, meant to inform other small business owners in the hopes that they don’t become mired in the same problems I did.

With a bit more caution and a little more reading of the fine print, I could have saved myself more than $2500 in wasted money that I can neither recover, nor refuse to pay.

In September of 2014, I received a phone call from a gentleman who claimed not to be selling anything, but to be calling from an agency associated with the government that evaluates businesses for their credit risk. He said that since I had such a good history of my customers paying by credit card with no chargebacks, I could qualify for a MUCH lower processing fee than I currently had.

I told him it sounded like he was selling something. Again, he said no, he was just informing me that my business was in a different bracket now, and I no longer needed to pay 3 percent for credit card processing. In fact, he knew I could get 1.4 percent. Well, my ears perked up, both at hearing that I was somehow more special than most businesses, and at the 1.4 percent. That’s unheard of. I compare merchant processing for my clients all the time, and the best I see is 2.7%.

I agreed he could meet me at my office.

The gentleman was pleasant and we easily built rapport. He had recently moved here from Arizona after being injured in a traumatic motorcycle accident. He had paperwork showing how I could sign up for this amazing rate. I said that was all well and good, but I was using an online accounting system, which processed invoices, online payments and recurring credit card payments. This service did not require me to use any single merchant processor, but I did need to know that his system would work with my accounting. He assured me it would. I double checked and talked to someone higher up. That person said he had no proof it would, but if it didn’t work right away, they would have their programmers make sure it did work for me. The tiniest little red flag went up at that point. That’s just doubtful. It either works with multiple products using API, or it doesn’t.

At the time, I was already angry with Quickbooks, because they only allow you to process through Intuit, and I was breaking up with them over it. This was the impetus I needed to break through the logjam and do something new. I was going to switch over to FreshBooks, where I could choose my merchant processor, once and for all. That fiery passion is what caused me to overlook such a clearly foolhardy promise from the company, MX Merchant Services.

The sales representative wanted me to fill out a lot of forms, but as a small business owner, I was very busy. I asked him to fill them out for me, and then we could go over them. He dutifully sat on the other side of my desk, filling out the paperwork. I asked about canceling if it didn’t work and he assured me I could.

We went over the paperwork, and at the back was additional paperwork for the physical credit card swiper. I told him I would never use it, because I don’t take payment that way. If I take payment in person, I use a swiper connected to my cell phone. Not some machine with receipt tape from the 1990s. He assured me I could ignore it,¬†it was just a benefit that came with the deal, and maybe someday I would use it. I assured him I would not. I signed the papers, assuming that his verbal assurance that I could cancel was in fact reflected in the paperwork. I DID NOT carefully read the fourth and fifth pages he handed to me in the stack. As it turned out, this was a separate lease agreement for the credit card swiper I did not want.

Next he told me he needed a voided¬†check from my bank. At the time, I was waiting for an order of business checks and didn’t have any on hand. I told him I would get a bank check the next day when I went to the bank. He seemed in a big rush (Hello! More red flags!) and offered to meet me at the bank to get the voided check. I handed it to him and he seemed relieved.

The next day he was in my office installing and testing this credit card swiper that I knew I would never use. Since my account with MX Merchant Services and my new amazing 1.4% rate was now in effect, I started trying to use it. I went to their website expecting to see something modern with a place to view integrations, and I was surprised to find an older website with an older interface where I could view transactions. Now I was starting to get worried. Behind me, the sales guy was frantically finishing testing the credit card swiper, which was hooked up to my Internet cable, so he could get out of my office before I realized what had happened. I called MX Merchant Services to get the authentication information I needed to set them up as the processor for my FreshBooks accounting, and they had no idea what I was talking about. Uh-oh. But not to worry, I thought. I can just cancel.

Over the next three weeks, I spent several hours on hold with MX Merchant Services, trying to cancel my account. They kept assuring me they would get it to work, until finally they relented and allowed me to cancel. Oh, but as it turned out, I would not be receiving any refund because there was no monthly charge for their service – only the processing fees. The monthly charge I was thinking of, that wasn’t from MX Merchant Services. That was the leasing fee for the equipment, which was Northern Leasing. I would have to call them to cancel the equipment.

Hmmm. Northern Leasing? I had never heard of them.

I called Northern Leasing only to be informed I had signed a 48-month lease with a no cancellation clause and a no warranty clause.

I dug out the paperwork and realized that, oh my God, I had in fact signed exactly that. I showed it to an attorney who told me sadly that it was airtight, and there would be no way to get out of it. My Internet research turned up many angry business people who tried to fight. But the court venue specified in the lease is Manhattan, so if you want to fight, you have to fly to Manhattan to try. Further, the reason the sales guy needed a check is they don’t allow you to charge the monthly lease payment to a credit card. They require a debit card. That way they are sure to get their money. Some companies have closed their checking account to try to get out of the lease, only to be pursued and sued by Northern Leasing.

I called and was extremely polite and explained the situation, asking if there was any way to get out of the lease. I was informed I could simply pay the full amount of all the lease payments in the future ($2,500) and return the equipment, and I would be free and clear! Well! Actually, this is somewhat tempting, because I also read accounts of people returning the equipment at the end of the lease, only to be told Northern Leasing never received it, and they had to keep paying the lease or pay the inflated replacement cost of the dated credit card terminal.

Please check my blog posts for the latest chapter of my journey.