September 2018 Complaint Roundup: PCI Compliance Slamming Scams

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 August and September. 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.

Beware “PCI Compliance” Calls

RC's August 15 comment on our Wholesale Banc review states the following:

These guys called my shop and attempted to have my employees send them copies of our merchant statement saying that we needed to be credited on PCI compliance fees. They totally misrepresented themselves. I called back the number they had left and spoke to the guy that had called my manager. I told them that I had Googled there phone number and they had attempted this scam on other people. They did not know our processor, account number, or really anything. The guy promptly hung up on me when I pointed this out.

Their practices are sleazy and unethical. I wouldn’t ever deal with them.

This appears to be a new variation of “slamming” in which Wholesale Banc claims to be your current merchant account provider so that it can “credit” you for overcharges. We are highlighting it because this practice is probably not limited to Wholesale Banc. Back in 2015, many unscrupulous processors were calling merchants to bring them “in compliance” with the EMV liability shift; in 2017, it became more popular to contact business owners to credit them for overcharges under the “new interchange rules.” It is likely that this line about PCI compliance fee overcharges is just another made-up reason to trick you into signing up for a second merchant account.

Remember: regardless of what a telemarketer might say, your provider is highly unlikely to independently contact you just so that it can credit your account.

Getting the Most out of a Low-Rated Provider

Nick's August 17 comment on our Riverside Payments review states the following:

I have very mixed opinions about these guys as a company. On one hand, they have very low rates, which is enticing, but on the other hand, switching over to them for my processor has been a complete pain in the ass. Between taking 9 months to actually be able to get switched over to them, and losing about $1500 in sales in our first three months with them because they forgot to check a single box on the back end that made it impossible for my customers to make purchases with AMEX, while also starting out with a much higher processing fee than I was told (which was higher than my previous provider), and finally, billing me a $500 tobacco processing fee which was promised to be covered, has seriously had me question the competence of this company. Ever since starting with them, I’ve felt that I’ve had to keep them on a tight leash and comb over every statement just to make sure things are kept in line and are staying how I finally have them.

Would I recommend them to a friend? Likely no. Is all of this hassle worth the overall 1% less than I am paying compared to my previous provider? Maybe, over time.

The only good thing that I really have to say is that things started getting better once Robyn started helping me halfway through this mess, and I’m now at a point where I am comfortable with the company. Of all the employees I’ve worked with over there, she is certainly my favorite because she gets things done and always has a good attitude about it. I likely would have cancelled these guys and stayed with my previous provider if it wasn’t for her.

Riverside Payments currently has a “C” rating from CPO, which we consider an average score. However, if you find yourself in a contract with a company that scores poorly by our rating standards, that doesn't mean that you should give up and accept high costs and poor service. If you're like Nick, you can review your monthly statement like a hawk and contact a customer service representative whenever things don't look right. Or, if you would rather not spend that much energy, you can work with an independent, third-party auditing service that will negotiate savings and monitor your statements for you. In other words, you don't need to put up with bad service even if you're trapped in a bad contract.

A Huge Hold From Stripe

Omid's August 18 complaint on our Stripe review states the following:

STRIPE currently is holding over $200,000.00 (Yes, two hundred thousand!!) of our funds due to ‘high dispute percentage’. Not only is this a complete lie (we had one dispute as a result of human error) but they closed the account immediately and it’s taken over a month to receive a response from their support staff.

After doing research, it seems that this is common practice by Stripe. IN ADDITION to holding 225k, they deposited a portion of that into our account and days later, it was gone. Stripe has no actual point of contact for clients who need support so we had to go to our bank to figure out what happened. Stripe claims it was returned by the bank and the bank (who we’ve been with for 10+ years) assures us that they did not return the deposits. Once we spoke to our bank manager, we got verification that the funds were in fact requested back by Stripe and sent to their bank in Toronto.

This is HUNDREDS of THOUSANDS of dollars. Without minimizing others who have had the same happen, I hope anyone who reads this realizes Stripe absolutely does not care or act in their clients best interest, regardless if you are processing $2,000/week or $200,000/week.

It’s been over a month since they closed our account and we’ve moved onto using another merchant. After one month and having not received any additional disputes, our account was in good standing. We requested a release of a portion (a compromise) of the 250K and were told no, Stripes policies are ‘firm’. Unfortunately, it does not seem that they are willing to hold any accountability for taking funds out of our account and we have retained a lawyer to pursue this further.

Stay away from Stripe!

This comment highlights the absolute control that payment aggregators like Stripe and Square exert over your funds. Regardless of how much money you process or how well-established you are, there is always a chance that a single chargeback or algorithmic error can freeze up gigantic sums of your money for months. If you are using Stripe or similar services and you have not educated yourself about how to win chargebacks, how to prevent fund holds, and how to get your money released, we recommend that you take a moment to understand your risk.

Blocked by the Algorithm

Michelle Swisher's September 11 comment on our Yapstone review states the following:

I have no words. I am an owner of a VRBO property that rents. I have a request for next summer, almost one year from now. I am on the check payment route (of which i have no choice). That means I do not receive payment until the day after the renters check in…one year from now. So the renters are required to put 50% down when booking. In this particular case that would be $8,000.00 for a month rental. Yapstone now will keep my $8,000.00 for one year. I can only collect the money up front if I am on the Advanced Pay system. I cannot get on the Advanced pay system until Yapstone “decides” that I can be on it. I have asked when that would be and they have told me they don’t know because the computer chooses that!!!!!! This is bazaar, they have my money for a year and I have no control over that or even when that can change. HomeAway you need to find another vendor to handle your payments. Are there not laws to protect consumers in this regard?

Michelle's case demonstrates the risks of relying on payment processing aggregators that use algorithms to determine risk classifications. Not only will she have to wait a year for her $8,000, but she has no way of knowing how to qualify for the fast track plan that would have prevented this issue. The use of algorithms in place of traditional underwriting when assessing risk is becoming more prevalent in the payment processing industry, so merchants looking for vacation rental merchant accounts should be sure that they know whether and to what degree their funds will be under the control of narrow AI parameters.

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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