Encore Payment Systems
Encore Payment Systems Overview
Encore Payment Systems (encoreps.com) is a merchant account provider based in Addison, Texas, that began operations in 2004. The company also does business in the U.S. under the names Prodigy Payment Systems and Momentum Payment Systems. Additionally, Encore has a Canadian sales arm called MOCA Payment Systems.
Two different agents claimed that Encore Payment Systems is a direct processor with HSBC Bank, which is surprising considering it’s a young company. After pressing the issue, one agent admitted that Encore occasionally uses Chase Paymentech for a processor, but insisted that the company is a direct processor in all other cases.
Besides offering credit card processing services, Encore Payment Systems also offers check conversion & guarantee, wireless processing, electronic benefits transfer, terminal sales & leasing, and gift/loyalty card acceptance. The company is a registered ISO/MSP of Deutsche Bank AG, New York.
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Encore Payment Systems appears to use an ethically questionable marketing strategy. First, the use of multiple DBAs suggests that the company is purposely attempting to spread its complaint count among the different business names. It also makes it possible for a merchant to cancel an account under one business name and then inadvertently sign up with the same company represented under another name. Nearly all merchant services providers that take part in this strategy have very poor reputations.
Second, the company appears to be a “hiring mill” that markets its business by continually recruiting independent outside sales agents (ISAs) who are only paid upon making a sale. Like many companies that use this hiring practice, Encore’s agents appear to be trained primarily on how to sell expensive merchant accounts and equipment leases in exchange for high commissions. They also appear to be poorly trained about the details of the merchant account agreements they are selling and the credit card processing fees associated with them. Agent turnover with this type of provider is typically very high.
Based on reports by merchants, there is evidence suggesting that Encore’s marketing strategy often results in the use of deceptive sales tactics. We cannot say if Encore encourages or endorses misleading tactics, but it seems that its pricing and underwriting policies make it possible. The company also appears to enforce contracts even when merchants claim to having been misled by an agent.
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||$95 per year|
|Equipment lease:||48 mos./non-cancellable|
Encore Payment Systems’s pricing and contract terms appear to vary based upon the merchant and the agent setting up the account. The company’s standard merchant account contract has a three-year service agreement with automatic renewal for one-year terms and an average Early Termination Fee (ETF) of $195; however, some merchants have reported ETFs up to $450.
An older version of the standard Encore Payment Systems contract is available below; it outlines a three-year agreement with automatic renewal, a $195 “deconversion” fee (which acts as an ETF), a monthly minimum fee of $25, an annual fee (probably a PCI Compliance fee) of $95, a monthly “bank access fee” of $9.50, and an expensive tiered pricing structure. Although this agreement appears to be outdated, we do not have any evidence that the company’s contract terms are any more favorable today.
Aside from the standard three-year merchant account contract, there are numerous reports stating that merchants were locked into four-year, non-cancellable equipment leases. Cancelling of these leases before the termination date is reported to cost in the thousands of dollars. We recommend avoiding leasing equipment from any company because it is often the most expensive option. Buying your equipment outright is often the best and most cost effective solution.
|Key Points – Complaints & Service|
|Live customer support:||Yes|
|Most common complaint:||Long-term leases|
For a provider of its size and time in business, Encore Payment Systems has a moderate-to-high number of complaints when we combine all of them together from its other DBAs (many of which can be found in the comment sections of our reviews). Even more disconcerting are the numerous complaints from former agents of the company. Nearly all of these former agents complain of deceptive hiring practices and that they were encouraged to lie to and mislead merchants.
As for merchant complaints, the common theme among them are several reports suggesting the use of predatory equipment leases that cost merchants thousands of dollars for equipment that can be bought in the low hundreds. Nearly all of the reported leases were four-year terms with no ability to cancel without incurring significant financial cost. One merchant’s experience with misleading sales tactics, poor customer service, and unexpected equipment expenses is chronicled here.
|Key Points – BBB Report|
As of this review, Encore Payment Systems is not accredited with the Better Business Bureau (BBB) and holds a “C” rating, up from a “C-” at the time of our last review. The BBB is reporting 67 complaints filed within the last 36 months (up from 64 as of our last update); however, when adding the complaint counts of Prodigy Payment Systems and Momentum Payment Systems (Encore’s other DBAs), Encore actually has had 180 complaints in the last three years. The complaints are somewhat evenly spread across issues with advertising and sales, billing and collection, and problems with products and services with the highest count. Of all the BBB complaints against Encore Payment Systems, 82% were resolved to the merchant’s satisfaction.
Based on the complaint count and resolution ratio, we are adjusting the BBB’s rating to a “D” for the purposes of this review. You can learn more about why we adjust BBB ratings in our rating criteria.
Encore Payment Systems scores low in our review because the company uses multiple business names, relies too heavily on hiring independent outside sales agents, has a moderately high complaint count for a company of its size and time in business, and appears to suffer from widespread use of deceptive marketing and sales practices. The company could improve its rating by eliminating the above mentioned problems.
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