UPDATE 8/14/2021: The Justice Department has charged Michael Mendlowitz and Richard Hart with wire fraud, mail fraud, and conspiracy to commit wire and mail fraud in relation to their operations as executives of Commerce Payment Systems. The Justice Department charges the company with “masterminding a years-long scam that took more than $30 million from more than 10,000 small businesses, who relied upon CPS to help them process debit card and credit card sales,” specifically stating that Mendlowitz and Hart “operated a fraud scheme founded on false claims of very low fees, along with false promises that there were ‘no hidden fees,' and that rates were ‘guaranteed for life.' In truth, however, CPS customers were charged all manner of hidden fees, and MENDLOWITZ subsequently altered customer accounts to add even higher fees. Among other deceptive tactics, MENDLOWITZ and HART used a ‘cost comparison calculator' that ostensibly showed potential customers a direct comparison between what they were currently paying versus what they would pay if they became customers of CPS. However, these cost comparison calculators were intentionally designed to conceal many of the fees that the customers would be charged.” Each charge carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. According to the same source, a “trial is scheduled to begin in United States v. Michael Mendlowitz & Richard D. Hart on April 29, 2019 at 10:00 AM in Federal District Court Southern District of New York, 40 Foley Square New York, New York.” It is unclear what the final sentences were.
The Commerce Payment Systems website is no longer active, and it appears that the company has closed. We are unable to determine whether this closure is temporary or permanent, but we have ceased updating this review for the time being. A LinkedIn profile for a Michael Mendlowitz names him as the president of Sapphire Capital, but it is unclear whether this is the Michael Mendlowitz who formerly served as CEO of Commerce Payment Systems. If you have any information about the current status of Commerce Payment Systems (including any rebrandings or DBAs), please share it in the comment section below this review.
Likely an EVO Reseller
Commerce Payment Systems (commercepaymentsystems.com, commercepaymentgroup.com) is a merchant account provider serving small merchants in most industries. There is some evidence that Commerce Payment Systems is an ISO of North American Bancard. According to multiple complaints, however, the company also does business as Evolution Bankcard, which is a subsidiary of EVO Payments International. It is therefore possible that Commerce Payment Systems is somehow linked to EVO Payments International, but this relationship is unconfirmed at this time. Launched in 2006, Commerce Payment Systems is a registered ISO/MSP of Deutsche Bank AG in New York. Michael Mendlowitz is listed as the CEO of Commerce Payment Systems, which is located at 1465 Broadway, Hewlett, New York 11557.
Commerce Payment Systems Customer Reviews
Here's What Their Clients Say
|Total Online Complaints
|Live Customer Support
|Most Common Complaint
High Complaint TOtal
We are currently able to locate over 90 Commerce Payment Systems complaints that accuse the company of being a ripoff or a scam, and the bulk of these complaints have been posted to the comment section of this review within the last two years. Common themes among complainants include unexpected fees and rate increases, difficulty canceling the service, unavailable or unhelpful customer service representatives, misleading advertising, and expensive equipment leases. Many merchants report an average hold time in excess of 30 minutes when attempting to call Commerce Payment Systems customer support, and there are also reports of disconnected customer service lines. Some merchants report receiving letters in the mail from the company, selling a mystery shopper program. Once customers followed directions on the letter, they had lost anywhere from $1100 to $2700 of their own money.
Commerce Payment Systems Lawsuit
As mentioned above in detail, Commerce found itself on the wrong side of an extensive lawsuit by the US federal government in 2019. This lawsuit appears to have caused the company to close.
Commerce Payment Systems Support Options
The overwhelming consensus appears to be that Commerce Payment Systems does not have capable customer service to manage the many complaints stemming from its sales practices and contract terms. Additionally, as noted above, the company appears to have loaded some consumer protection sites with fabricated testimonials in an attempt to manipulate its reputation among merchants. These factors have lowered its grade in this section to a “D.”
Commerce Payment Systems Online Ratings
Here's How They Rate Online
|Product & Service Complaints
|Billing & Collection Complaints
|Advertising & Sales Complaints
|Guarantee & Warranty Complaints
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
Commerce Payment Systems is not an accredited business with the Better Business Bureau. As of this review, the company holds no rating with the BBB and has had no complaints filed against it. This is very likely to do with the closing of the company, as at the time of our last review, it had 266 complaints filed against it in the last 36 months. Of the total complaints, 8involved problems with delivery, 30 stemmed from advertising or sales issues, and 63 cited problems with the company’s products or services. The bulk of the complaints (165 of them) were filed in regards to billing or collections disputes. 103 complaints were resolved to the satisfaction of the merchant, while 148 either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant. The remaining 15 complaints remain unresolved. In light of the company’s complaint rate and resolution ratio, we agree with the BBB’s previous rating of “F”.
Commerce Payment Systems Fees, Rates & Costs
A Closer Look at The Contract
|Early Termination Fee
|PCI Compliance Fee
|Equipment Lease Terms
Commerce Payment Systems Contract
Numerous merchant complaints have described the standard Commerce Payment Systems contract as a three-year agreement with a high annual fee, a PCI compliance fee at or in excess of $99, a monthly statement fee of $10, an annual fee of $79, monthly minimums as high as $34.95, and other various fees. The company does not appear to charge an early termination fee (ETF), but merchants have reported total annual expenses that far exceed the one-time expense of a standard ETF. In addition, the company’s fraud prevention policies appear to be generating many merchant complaints, as complainants report receiving their funds only after an excessive delay and many complaints. Commerce Payment System’s apparent affiliations with North American Bancard and EVO Merchant Services are likely responsible for some of these complaints about its contract terms. If you have any knowledge of the standard Commerce Payment Systems contract, please leave that information in the comment section of this review.
Commerce Payment Systems Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Employs Independent Resellers
|Advertises Deceptive Rates
|Discloses All Important Terms
Outside Sales Teams
Commerce Payment Systems appears to utilize telemarketing, online advertisement, and independent sales entities to market its services. Many negative Commerce Payment Systems reviews accuse the company’s telemarketers and field agents of misrepresentation of rates and nondisclosure of fees. Additionally, Commerce Payment Systems appears to have paid other consumer websites for the privilege of posting positive reviews in an attempt to bury negative reviews. It is hard to find many verified reviews of this company that report a positive experience with its sales staff.
Deceptive Rate Quotes
The Commerce Payment Systems website advertises debit card rates of 0.35% and credit swipe rates of 1.59%. These rates are likely the company’s “Qualified” rates for these transactions, and the website makes no mention of the higher “Mid-Qualified” and “Non-Qualified” rates that merchants will pay for the majority of their transactions. We consider this type of rate quoting to be deceptive, since it may give merchants an unrealistic expectation of the rates they will pay. We have also seen Commerce Payment Systems advertisements on various websites that promote these misleading rates. Below is a screenshot of such an advertisement:
Misleading Rate Quote Example
The terms enclosed in red are textbook examples of misleading advertising in the credit card processing industry. It is unclear what the company means by “Unbeatable rates-.25%.” Is this the company’s only rate? Which transaction types will receive this rate? The answer, in all probability, is none of them, since it’s an absurdly low rate for any processor to offer. Merchants should not expect to pay an effective rate that low anywhere.
The “Free Credit Card Terminal” claim is a common one among merchant services providers. The terminal may be initially free on a monthly basis, but there are always strings attached. Usually, the free terminal is included as part of a merchant account contract, meaning that a merchant is required to keep and use the terminal for the entire duration of the service term. In addition, the monthly cost of the terminal may simply be included as part of the merchant’s overall processing fees rather than be totally free. Upon canceling service, a merchant may be required to ship the terminal back at his or her own expense or to pay a termination fee of some kind–again, not exactly free.
“No locked-in contracts,” like the rate quote above, is a vague term that leaves a lot of wiggle room for the advertiser. Does this mean that there are still contracts, but that they just aren’t “locked-in”? How is “locked-in” defined? Are there termination fees associated? Or are there other penalties for cancellation that basically function as an early termination fee? Merchants should not trust a claim like this one without carefully reading the actual terms of service provided by the company.
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