SUPPLEMENTAL UPDATE 11/2/2015 – Flagship Merchant Services (AKA: iPayment) has repeatedly made hostile attempts to force the removal of this review. These have included intimidation through bullying and threats of litigation under false pretenses as well as an illegitimate DMCA claim filed with our host, which was rejected on the grounds that it was a “guise” to suppress fair use of a trademark. It is our opinion that such actions reveal the depths at which Flagship’s executives will stoop in an attempt to suppress constitutionally protected free speech that is critical of their business practices. We view these actions as not only highly unethical, but as a demonstration of their unwillingness to correct the problems that cause merchant complaints and, instead, a preference for aggressive strong-arm retribution tactics. If you have been a victim of such threats or bullying, please detail your experience in the comment section below.
Flagship Merchant Services (cardservicesales.com & flagshipmerchantservices.com) is a large merchant account sales organization based out of Charlestown, Massachusetts. The company was founded in 2001 and appears to have grown rapidly in the last 10 years. Flagship is a reseller of processing services primarily provided by First Data and iPayment but appears to handle the customer service of its accounts in-house. Flagship’s website and online advertising boasts that it has been a top-rated credit card processor on TopTenReviews.com for eight consecutive years, but it is unclear at this time how a business qualifies for that honor.
Flagship’s Acquiring Bank is Wells Fargo Bank, N.A. of Walnut Creek, California. Sean McEvoy is the company’s director of operations, while its director of sales is Mark D’Ambrosio.
Sales & Marketing
Key Points - Sales & Marketing
|Employs Independent Resellers||No|
|Advertises Deceptive Rates||Yes|
|Discloses All Important Terms||No|
This reviewer located one use of deceptive marketing by Flagship in which the company advertised on its homepage and in Google Adsense ads that “rates start at 0.38% plus $0.19 per transaction.” This rate quote is misleading because it only applies to a particular transaction type, but the majority of a merchant’s transactions will run at much higher rates. Flagship fails to mention that the merchant will experience other rates and fees in addition to the unrealistically low rate quote. As you can imagine, these types of quotes can lead to confusion. Flagship has removed this specific rate quote from its homepage since our last update, but merchants may still encounter similar “teaser” quotes when speaking directly with Flagship representatives.
Flagship appears to primarily use inside sales staff to market its services instead of using outside independent sales agents. Inside sales personnel are the preferred marketing strategy for this reviewer because the sales tactics of these agents can be better controlled. This is of course assuming that the company doesn’t encourage deceptive sales practices, which may be an issue with Flagship due to numerous complaints indicating that agents failed to fully disclose important fees and contract terms (covered in more detail below). On the surface, Flagship does not appear to engage in any egregiously deceptive practices at this time. However, the consistent merchant complaints about undisclosed fees have lowered its score to an average grade of “C” in this section.
Costs & Contract
Key Points - Costs & Contract
|Early Termination Fee||None|
|PCI Compliance Fee||$99 Per Year|
|Equipment Lease Terms||Variable|
Rates and fees of Flagship merchant accounts may vary for a variety of reasons including a merchant’s business type, processing volume, and the agent setting up the account. In most cases, the company offers month-to-month contracts with no cancellation fees but charges an annual PCI Compliance fee of around $99 in addition to several other monthly fees, which seem to vary in name and amount. Merchants are encouraged to carefully read and understand Flagship’s merchant account agreement prior to signup, as many of the complaints about the company describe undisclosed fees or higher-than-expected rates. Flagship is capable of offering interchange-plus pricing, but it does not actively promote it. Be sure to read “Fee Sweep” to understand merchant account fees and how to negotiate them in your favor.
Complaints & Service
Key Points - Complaints & Service
|Total Online Complaints||130+|
|Live Customer Support||Yes|
|Most Common Complaint||Hidden Fees|
For a provider of Flagship’s size and time in business, there are a moderate number of Flagship Merchant Services negative reviews filed in the usual forums, as well as over 80 in our comment section below. Many of the complaints follow a common theme, which is the reason Flagship is receiving a low rating in this section. Of the reports, numerous merchants complain of receiving higher than quoted fees after signing up, sudden increases in fees without notification, hidden/undisclosed fees, and difficulty cancelling service. One complaint, found here, outlines a typical negative experience: “When we signed uo with this nightmare of a company, they advertised that they were BBB accredited and A rated. Once we started having issues with them I checked BBB and they were not even accredited! […] They charged my account 7 times more than what they said they would charge me per month and when I called they said that they can only credit my account if I do not cancle my service.”
These types of complaints usually indicate systemic problems in which sales agents often fail to disclose fees and instead rely on the merchant to find them within the contract. It can also be an indication of problems with the billing system. Either way, Flagship can improve its rating in this section by revising its sales methods so as to prevent future complaints of this nature.
Key Points - BBB
|Product & Service Complaints||26|
|Billing & Collection Complaints||90|
|Advertising & Sales Complaints||28|
|Guarantee & Warranty Complaints||0|
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.
As of this update, the Better Business Bureau is reporting that Flagship has been accredited since May 2015 and is assigning the company a grade of “A-.” Flagship has received 147 BBB complaints filed in the last 36 months and 70 negative informal reviews. Of the 147 complaints, 90 are regarding billing and collection disputes, 26 with service problems, and 28 with advertising and sales issues. Flagship has resolved 64 of the complaints to the merchant’s satisfaction. The remaining complaints either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.
At the time of our last update, the BBB had posted a notice containing the following information:
According to BBB files this business has a pattern of complaint concerning non disclosure of “required” charges. Specifically for PCI*. Consumers state that the business charges for PCI compliance or Noncompliance but that was not disclosed in the original agreement made.Consumers state that the business claims notification was sent however consumers claim this is an additional charge not disclosed to them. Consumers indicate that they want refund or cancellation of service. BBB sent a written notice on 7/28/14 and 9/8/14 to identifying the potential pattern of complaint with a request for a business response. As of 10/14/14 the business did not respond to BBB’s request.
*The Payment Card Industry Data Security Standard (PCI DSS) is a proprietary information security standard for organizations that handle cardholder information for the major debit credit prepaid, e-purse ATM, and POS cards
This notice has been removed from the company’s BBB profile since our last update. In that time, Flagship has also paid the BBB to join its accreditation program and seen its grade rise from a “C” to an “A-” despite an increase in total complaints. Given the company’s increase in complaints and negative reviews since our last update, we have adjusted the BBB’s rating to a “D.”
About Phillip Parker
Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry. Schedule a Consultation with PhillipSchedule a Consultation with Phillip
Copyright & Disclaimer
Copyright © CardPaymentOptions.com, Inc. (Digital Fingerprint: 0d38c6720f0d78a701b74d58653af608). Getting paid to re-write this page? Click here to earn a reward.
Any unauthorized copying and reproduction of the content of this page, including all meta data and computer code, is strictly prohibited. While the information in the above article is believed to be accurate as of its publish date, the author and publisher make no representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents. The author and publisher shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this material, which is provided “as is,” and without warranties. Any and all use of trade names and/or marks are for identification purposes only and shall not be construed as a claim of affiliation, or otherwise, with CardPaymentOptions.com, Inc. ("CPO") in any form. The sole purpose of the material presented herein is to alert, educate, and inform readers. It is not intended as legal or financial advice.