March 2019 Complaint Roundup: Avoid This $43,000 PayPal Money Mule Scam

What Are Other Merchants Saying?

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© Depositphotos – James Steidl
Here at CPO, we review every comment that we receive from our readers, and sometimes we see merchants mention a topic that isn’t covered in our reviews. To help you stay on top of the trends and issues in the credit card processing industry, we’ve gathered the following merchant complaints posted to CPO during February and March. If you would like to respond or add your thoughts to any of these comments, please follow the links to the original comments and reply to them directly, or leave a comment of your own below the appropriate company’s review.


A $43,000 PayPal Money Mule Scam

Susan Albert’s February 24 comment on our merchant account glossary entry states the following:

Mr. Parker, I am a 63 year old woman who was scammed out of $63,800 by one company and $43,000 from another company. The first company was to set up 4 Merchant Processing Accounts and EIN#s. Nothing has come from them and they refuse to refund my money.

The second company set up my Merchant Account, EIN# and website. I set up a PayPal Pro Account, with Virtual Terminal access. I would process credit cards he would text me, transfer the proceeds from PayPal to my bank and then wire transfer the money, less my 5% to his bank. A large dollar amount charge back came and although I requested many times, he never sent me any information which I could dispute the refund request. When I told him I was concerned about this, he threatened to ruin me financially as he had all my information. Suddenly an influx of charge backs came in, $13,000, PayPal has banned me from using their services forever and I had already transferred the funds to him. He and his company have vanished.

I have left out the company names in case it’s not allowed.
I have lost all my savings because of these dishonest people.
Merchant processing is a nasty business.

Whether or not she knew it at the time, it sounds like Susan was involved in a “money mule” scam. The nature of PayPal’s virtual terminal is that it allows users to type in any credit card number and process a payment when the cardholder is not present. In Susan’s case, it appears she was being texted stolen or otherwise fraudulent credit card numbers and receiving 5% of revenues in exchange for processing those payments under her PayPal account. When the scam was brought down by legitimate chargebacks, the scammer abandoned her with nothing but a lifetime ban from PayPal and massive personal liability.

As Susan’s case illustrates, processing another business’s transactions under your account is very dangerous and potentially costly behavior. This is the first time we’ve heard of this scam operating through PayPal, but business owners and non-merchants alike are encouraged to report the perpetrator to the relevant supervisory organizations if they encounter this scam.


Northern Leasing Back From The Dead?

John T Brennan’s February 23 comment on our Northern Leasing Systems review states the following:

Unfortunately some of the judges in the New York Civil Division are as crooked as this company. I had a phone hearing and was just blew off by the judge, giving a judgement to this crooked company, who then took several thousand dollars out of my bank account. Also had my writs denied by another judge. Our only recourse is for the New York Attorney General to sue them and vacate all of the judgements. I haven’t heard anything since Schneiderman resigned, despite asking for information several times. I think the new New York Attorney General dropped the case.

When New York Attorney General Eric Schneiderman filed a sweeping indictment against Northern Leasing Systems in 2017 (his second such lawsuit), it appeared that one of the lowest-rated providers on CPO would soon be wiped from the industry for good. In fact, as of a May 2018 public filing regarding this case, the case appeared to be well on its way to its inevitable conclusion.

In the wake of Schneiderman’s abrupt resignation in 2018, however, we have received our first report that the lawsuit may be on hold or even dropped. We have found no other evidence to corroborate John’s claim at this time, but Northern Leasing’s victims are encouraged to continually demand action on this case. In our view, the resurrection of the Northern Leasing Systems organization would make the entire payment processing industry more dangerous for merchants.


The Perils of Independent Agents

Jordan Schaner’s March 6 comment on our Merchant Club of America review states the following:

On 1/17 I signed my grooming business up with Merchant Club. Was told how much cheaper they would be than my current machine and how simple and easy this process was. $99/month for leasing and then .01% of each transaction.

On 1/25 unknown charges came out of my account so everything was put on hold until I found out where these charges were from.

On 2/4 John Michael Flannagan showed up to my shop unannounced around 2:45pm. I had a baby doctor appointment this day at 3:15 and did not have time to deal with him. He said he drove all the way from Roanoke to speak with me about the unknown charges, which had nothing to do with this company. He wouldn’t stop talking to me about personal things(telling me how he “got fixed and had to ejaculate 100 times before it would be effective then ended up with twins because he didn’t ejaculate 100 times”). After these things were said to me, in front of my co-worker, so I do have a witness, I felt very uncomfortable. It was completely inappropriate and in my eyes considered sexual harassment. You in no situation talk to a young woman about your ejaculation. Period. I still feel uncomfortable that was said to me and it has been a month. He then put me on the phone with a Rob who is supoosedly his boss who I also did not have time to talk to. i was told I would not be charged for the first month and will be able to cancel if I’m not happy. Fine. I was then late to my doctors appointment which in case you all didn’t know its a $50 fee.

On 2/8 I had to sign a document for the machine to be sent to me and was told it would be overnight-ed to me. Later that evening I noticed a charge on my account for $35.38. There was a one time activation fee for $25(which is totally understandable even though I was never told about it) and a $10 monthly fee(so that would make my monthly payments $99/month, plus the .01% of every card ran, plus this $10 monthly fee I was never told about). They also charged me $0.02 to test it. Mind you I had just signed for the machine to be sent to me. I did not have the machine in my possession but was already paying for it. I was not happy about this extra fee I was NEVER told about and was told it would be adjusted. John specifically said “I will have it fixed for you”.

On 2/13 I still had not received the debit machine & was told it was because my paperwork was not completed. I signed my document on 2/8 so the paperwork not being completed was not my issue, I was told I would have my machine on 2/9. I talked to John again who said “It will be there today”

On 2/14 I still have no debit machine, John said he would check the tracking and get back to me. Never did.

On 2/15 I still did not have a debit machine. I told John I was done with this, brought up my charge of $35.38 again for a machine I still did not posses, also told him about an email that said I would be charged the monthly fee on 2/20 for the machine I still did not have. Was again told “It will be there today” failing to address my other concerns about the money being taken out of my account for a machine I still did not have. He decided to tell me how I wasn’t charged for anything yet, although its on my bank statement and how he is not responsible for deliveries even though he told me it would be overnight-ed on the 8th. i proceeded to tell him I wanted someone else’s number to deal with and handle my concerns and he refused to give it to me. Said someone was calling me and no one ever called.

On 2/17 I asked for someones number to call again and sent my bank statement with the $35.38 charge, mind you i still had not received the machine. He tells me that the charge on my account did not looks like it was from them. I have the paper bill and it is from their merchant. He again says it will be corrected and refused to give the number for someone else to speak with.

On 2/18, I was still never contacted by ANYONE from this company and had still not received the machine. I left a voicemail with customer service at 1:53pm and spoke with a girl at 3:43, told her everything that was going on including Johns disturbing comment about ejaculation and she said she didn’t know how to help me because I signed a lease for this machine, which I was also never told abound that a higher up would call me back. Sexual harassment to this company is clearly not a concern when this should have been delt with immediately.

On 2/19 I left a voicemail at 10:49am, 12:02pm, and 1:14pm. Finally a Rob called me back and said he will cancel everything but wanted me to think about it for a couple of days. Will refund my money, I would not be charged for the month on the 20th and to call him directly, that I will not have to deal with John.

On 2/20 I was charged $110.39, had still not been refunded for the $35.38 from 2/8. So now a total of $145.77 had been drafted from my account when i had been told the $38.35 would be refunded and the next payment would not be charged. I called Rob at 3:49pm and was never called back.

On 2/21 at 9:39am I called Rob and he said “now is a bad time to call I will call you later” – terrible customer service. He called me back at 2:25pm and said that everything would be cancelled and money would be refunded, was told to refuse the debit machine if it ever showed up.

On 2/26 I called Rob again at 10:57am because the money was still not back in my account and he said he did not know when it would be refunded but it will and it has been handed over to operations.

Today I have called Rob 4 times, left him 2 voicemails, sent him a text and left a voicemail with customer service because I still have not been refunded. No one has called me back and I am still owed $145.77. This is unacceptable. Everything I have delt with from this company has been the worst customer service I have ever delt with, the sexual comment that was made to me has been brushed under the rug like it has never happened, I have been taken advantage of because I am a young business owner, and now I cannot get a single person from this comany to even contact me back.

DO NOT DEAL WITH THIS COMPANY! WORST EXPERIENCE EVER AND I AM STILL OUT $145.77. Its sad that I will have to contact a lawyer to handle sexual harassment and to have $145 refunded because no one in the company will speak to me.

As if the deceptive sales tactics and poor customer service weren’t enough, Jordan also claims to have suffered the indignity of sexual harassment at the hands of an independent sales agent working for Merchant Club of America. We don’t have much to add to Jordan’s story, except to note that this is another reason why CPO advocates for supervised, in-house sales employees rather than unaccountable independent sales agents. Merchants who are concerned about having an experience like this may want to consider working with a CPO Accredited Agent.


More Details on Square Cash Customer Support Scams

Azeez’s January 29 complaint on our August complaint roundup states the following:

don’t normally do transactions thought anything except my bank. I just read a complaints similar to mine. So I have been scammed of $4000. This means cash app itself is a scam. I All I did was try to send $500 to a merchant through cash app. The transaction was declined for my “protection” and refund had been issued and would be returned to my account is 3 business days. After that I did not receive my refund.

I tried to contact CashApp to no avail. I looked on Google and found 855 number and they answered. And indeed they worked through my cash app and gave me specific info. This is why I believed them.

In order for me to get my $500 refund I must buy Google play card for $500 which I did. After that they said because I live in New York minimum is $1500 which means additional $500 gift card which I did. Then they started giving excuses after I didn’t receive my refund that CashApp doesn’t allow them to deposit money. And in order to get it through their direct processing I would need to buy another Google card for $1000. I was furious. I contacted police, filled FTC, filled Google complaints. Police didn’t help one bit. They were just blaming me. These guys in the other end go by name John Jose and Joseph Suri. They access my computer to do this process. I believe them until the last minute even after I contacted police. They told me that many people filled FTC cases against them but it didn’t work. I also learned that CashApp doesn’t have customer support number which I told these guys but they denied. I did speak to cash all through email but they can care less about the missing $500. They showed no empathy. Instead they told me that my file is closed. Clearly CashApp square CashApp is very much responsible for lapses. They are very poor organization and they need to shut down. This is not how to handle business. We talking about hard earned money. I have been reading complaints about Square cash before I found myself into this but they aren’t specific as much as I read here. Complaints on this site are very similar to mine. This prove that I was scammed and I have no way of getting my money back. Difficult to prove. I have bunch of Google gift cards as my only evidence. Bank refunded only $500 transaction lost in CashApp database. Anyways I’m expecting $4000 refund since Monday February president day and the following day I called Joseph Suri and John Jose but their number doesn’t work all day.

Cash app square Cash must be fined heavily. They allowed these scammers to scan people. They are not partly responsible but fully responsible.

Azeez’s post provides a bit more information on a scam that we originally reported on back in August 2018. In addition to the previously reported name “Eric,” the scammers also appear to identify themselves as “Joseph Suri” and “John Jose.” The other details of the scam are similar, including the use of an 855 number. Square Cash users should bear in mind that this scam still appears to be going strong, and it will likely continue until Square decides to offer an appropriate level of customer support.


Cryptocurrency, Marijuana, and a Possible Exit Scam

Brendan’s March 4 comment on our GreenMed review states the following:

In fairness to Robert Bergman, in contacting his assistant directly and getting feedback from him it seems that he was largely in the dark. It would be a good token gesture for him to allow us to be able to use tokens to acquire seeds to equal value at ILGM…..I only invested in this ICO because Robert Bergman was an adviser . Ive lost 5k and while that’s not his fault I think he should really front foot it. David Dahan and Bram Kornfeld have been dishonest and given that Greenmed was founded in the US I can only hope that they are held accountable for their actions.

Brendan’s comment more or less confirms what a number of online commenters have claimed for months: that GreenMed took the money invested into its marijuana cryptocurrency app and disappeared. Whether this decision came late into the development process or whether it was their intention from the start is unclear. However, this outcome doesn’t inspire any confidence in the use of cryptocurrency to get around the restrictions on marijuana, CBD, hemp, and kratom merchant accounts.

Have you had an experience that you would like to share with these commenters? Reply to their comments and you may be featured in next month’s complaint roundup!

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