Merchant Data Systems Review
UPDATE 8/14/21: The Merchant Data Systems website (merchantdatasystems.com) is no longer an active website. At one point it redirected to a website for “Company.com,” a business services provider whose services include payment processing. It is unclear whether Company.com acquired Merchant Data Systems or whether it is simply a rebranding of Merchant Data Systems, but the two entities appear to share the same management team. It appears that Merchant Data Systems is no longer an active credit card processing brand. We will therefore no longer update this review, and we plan to publish a review of Company.com soon.
Merchant Data Systems (merchantdatasystems.com) provides merchant accounts for retail, restaurant, and e-commerce businesses. The company also offers its own payment gateway as well as the First Data (now Fiserv) Global Gateway. Founded in 1997, Merchant Data Systems is headquartered at 1688 Meridian Ave Suite 802, Miami Beach, Florida 33139 and is sponsored by Wells Fargo Bank, N.A., Walnut Creek, California, and Deutsche Bank AG as its Acquiring Banks. The company's president is Drew Freeman.
Merchant Data Systems Customer Reviews
Here's What Their Clients Say
| Total Online Complaints | 10+ |
|---|---|
| Live Customer Support | Yes |
| Most Common Complaint | Termination Fees |
Merchant Data Systems Customer Service
Approximately 10 Merchant Data Systems negative reviews have been registered on this and other consumer protection sites, some of which are old enough so as not to be of too much concern. Issues include excessive cancellation fees, holds placed on large transactions, poor customer service, difficulty in canceling accounts, and fraudulent charges. Merchant Data Systems has made an effort to respond to most complaints listed and to resolve any pending issues, including, in one particular case, a refund of a cancellation fee. Merchant Data’s site offers a dedicated email address and 24/7 customer service phone line.
Merchant Data Systems Online Ratings
Here's How They Rate Online
| Product & Service Complaints | 0 |
|---|---|
| Billing & Collection Complaints | 0 |
| Advertising & Sales Complaints | 1 |
| Guarantee & Warranty Complaints | 0 |
| Delivery 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.
Only One Complaint
Merchant Data Systems is an accredited business of the Better Business Bureau and currently maintains an “A+” rating with 1 complaint listed against the company, which was an issue with advertising or sales. The complaint either was resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.
What Merchants Say
Merchant Data Systems has also received 1 negative review to its BBB profile. The review describes an early termination fee and poor customer service:
Unethical contract terms and auto renewal that was never explained and never received the operating agreement. Stole $5400 from me Our small family run business has been with MDS since 2005. We had been happy with the service provided but in september of 2018, our company changed to a different point of sale software that integrated credit card processing into the sale. We no longer could use MDS, So i called to let them no i no longer needed their services. Fast foward to November and they just drafted $5400 out of my account. I called and spoke with *****, a supervisor, and he explained this was my early termination fee. Apparently back in 2014, my sales guy, *** **** was slick enough to slip in a piece of paper that in tiny print says that i have read and understand the 38 page MDS operating guide. *** never explained that there was any sort of 3 year contract and/or auto renewal. I’ve never even seen the “operating guide”. The only forms i was given via email was an application. So of course i signed what i perceived to be an application. When I called to cancel, the lady on the phone never mentioned anything about a termination fee. In my opinion, this is an unfair business practice. Clearly from reading other BBB and GOOGLE reviews…I am not alone in this thinking. Its a reminder that good will and common sense no longer prevail in our marketplace. I’m extremely discouraged and disappointed in ***** and my sales guy *** **** for knowingly deceiving myself and others like me.
This merchant would be better served by one of our top-rated processors.
A “B” Score
In light of these figures, we have adjusted the BBB’s rating to a “B.”
Merchant Data Systems Fees, Rates & Costs
A Closer Look at The Contract
| Swiped Rate | Variable |
|---|---|
| Keyed-in Rate | Variable |
| Early Termination Fee | $250+ |
| PCI Compliance Fee | $99 |
| Equipment Lease Terms | Variable |
Merchant Data Systems Contract
The standard Merchant Data Systems contract (available below) outlines a three-year term that automatically renews for another three years. On other consumer protection sites, some complaints have also reported $10 statement fees and annual fees (possibly PCI Compliance fees) of $99. These totals are consistent with industry averages.
If canceled within three years, the contract charges a Liquidated Damages-style early termination fee. Specifically, the contract states the following with regard to its cancellation process:
If this Agreement is terminated by either party for any reason before the end of the then-current term, or if you or any of your Affiliates violate Section 17 hereof, you will immediately pay us, as a termination fee, the greater of (i) $250.00 for each year remaining in the then-current term or (ii) the fees (net of Association charges) we would have received based on the average monthly transaction volume during the highest 12-month period prior to termination (annualized in the event such period is less than 12 months) (or the fee we should have received, based on your representations in the Application, if greater) during the months remaining in the then-current term but for such termination.
An Expensive Option
In our opinion, this is an excessively complicated early termination fee that bears no relationship to the actual costs generated by a merchant’s cancellation. It therefore has the potential to be far more expensive than industry averages. Merchant Data’s use of independent sales agents might result in some variance among contracts, so merchants are encouraged to ask their sales agents which terms are negotiable and which are not. It is likely that each Merchant Data sales agent is cleared to alter the provisions of the standard contract to a certain extent. See the Merchant Data Systems Merchant Agreement.
Merchant Data Systems Employee Reviews & Sales Tacitcs
Should You Work For Them?
| Employs Independent Resellers | Yes |
|---|---|
| Advertises Deceptive Rates | No |
| Discloses All Important Terms | No |
Outside Sales Team
Merchant Data appears to hire independent sales agents to resell its services. This is a common industry practice that often results in an untrained, unregulated sales force. One theme among complaints found on this site and elsewhere has to do with Merchant Data sales agents agreeing at the point of signing to waive specific fees or provide low rates and then failing to follow through on these guarantees. In these cases, Merchant Data Systems usually refers merchants to their signed agreements. In light of this, merchants are encouraged to only do business with agents they trust. Merchant Data does not appear to engage in any deceptive marketing tactics in its official materials at this time.
Our Merchant Data Systems Review Summary
Our Final Thoughts
Merchant Data Systems rated as an average merchant account provider according to our criteria. The company has a lower-than-average number of complaints for its size and time in business, but several complaints about unreliable sales agents indicate that the company could stand to better train and regulate its sales force. Its standard contract also appears to include an excessively harsh early termination penalty. However, it appears to be closed. Merchants are advised to do business with agents they trust and to carefully examine all contract terms.
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Theresa
This is the most unethical and scandalous company.
DO NOT do business with this Processor. We signed an application with them and were approved but we never received our executed document or the disclosures. We knew the 3 year contract was coming up and starting shopping around to other processors, and of coarse the vital information we needed was the exact time our contract expired so we could send them the appropriate non-renewal form. On 5/2/17, I called and spoke with representative, Ladiamond, while I was in a conference room with 2 banking individuals. Ladiamond told me the end of our contract was 12/23/17 plus she gave me the ETF amount if we cancelled on that date. I sent MDS (Company.com) our cancellation of non-renewal more then 60 days(10/20/17) in advance via fax and certified mail. When I went onto my online banking I noticed close to 13K was deducted from our account. We learned it was an ETF for a new 3 year contract which automatically renews. When we called to talk to the manager Randy he said our contract automatically renewed on 11/23/17, then he changed the date to 11/18. We explained that we relied on the information from their representative. He became defensive and said LaDiamond did not work in that department They continued by withholding money from us by not depositing into our bank, at one point nearly $35k. Randy said if we renewed the contract that he would release our money. We are a small Mom & Pop restaurant so what choice did we have. They sent us a new application with no disclosures which states that we have read the 43 page disclosures. How can we sign a application that states we have read something that they have not delivered to us and of coarse I had to request it. Randy emailed me stating that if he did not receive the application by the end of the day (being 2pm our time), he would turn us off. No pressure!!! We signed a new contract, but they did not accept it. They released some money, but to this date they still have $22k of our money and will not release it. They STOLE IT. I see many people on different sites have had the same experience. It is odd that they do business in Florida when there ISO is in Walnut Creek, CA and the dispursement center is in Thousand Oaks, CA. I assume the laws in Florida support criminal behavior.
Michael Castro
I have been a client of Merchant Data Systems for 13 years. I think their service is about the best I seen in my 31 in business. Their rates are great and payment process has always been according to their agreement, within 24 hours. The exception of a few charge backs and personal customer disputes that have nothing to do with MDS I am a Very happy customer.
Phillip CPO
Hello, please authenticate your testimonial by responding in this comment thread with your business name, location, and/or website address.
Britney Arredondo
Honestly I feel very scammed due to the fine print that the have in the legal documents you initially sign in the beginning. When you do want to cancel your form they send you a cancellation form which is great. You sign this form and then they bill you for $900!!!! I was not notified at any time that by canceling this service I would be forced to pay the “early cancellation fee”. If I waited a few more months and kept my account open I would have only paid the monthly $30 until my contract expired. The cancellation form DOES NOT say this anywhere which is the most frustrating part. When I told the customer service representative she told me it is because it was on the original documents that I signed. Very upset with this company because I truly feel scammed. We weren’t even going to a competitor company.. the company was dissolved completely.
Adeline
I entered into a three year contract with Merchant Data Systems which was set to end on March 2016. My company was going out of service online and I would no longer need Merchant Data System’s service once the term of the contract was fulfilled. In order to cancel the service, which apparently automatically renews for three year terms if not cancelled on time, I called their membership department and spoke with one of their representatives who went through the cancellation process with me. Instead of directing me to the contract itself, I spent over an hour on the phone with the representative as he assured me that there was absolutely no way that I could cancel at that point in time without incurring a $250 penalty, and that I would have to wait until March 1st, once the initial term expired to cancel the contract. I asked for a direct oral confirmation and I was assured that the best way in which to cancel without incurring a fee would be to cancel just before March 1st, when the new term would go into effect. After numerous attempts to reach management, I was finally able to reach manager Will Cruz, who once I informed him of the purpose of my call, instantly became aggressive and informed me that there was no way I could cancel without a $750 cancellation fee because it was too late. I attempted to explain the situation, and informed him about the explicit oral representation made by one of their agents months back, and his response was a simply that he could not offer any assistance on a “he said/she said”matter and that all he could offer were the abidance by the exact terms of the written contract. I again asked for some assistance considering the blatant misrepresentation that was made by one of his agents and again he responded with complete denial of the situation. While I understand that a written contract typically represent the final terms of an agreement, it is not possible that an agent of theirs authorized to speak on their behalf could so blatantly misrepresent the facts and deceive so egregiously in order to force a client into another three year term for a useless service or a ransom. Further, Will Cruz then attempted to lecture me on contract negotiations and how ultimately it is the customers responsibility to read the contract, even if an oral misrepresentation was made purposely to mislead. Now, they are asking that either I continue to pay for their services for three years or pay a penalty cancellation fee for $750. I want my contract to end without any further penalty fee, and I want this company and Will Cruz reprimanded and looked into for their fraudulent behavior. Consumers must know about the way they conduct business.
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Are you with Merchant Data Systems? Learn how to resolve this complaint.
Sarah
TERRIBLE!!! All sorts of hidden fees that are in tiny print. Also, when signing the initial contract if you don’t say you want to terminate your contract your contract will renew every year.
Ilan
Did you resolve?
Jared H
Merchant Data Systems has not honored our contracted rate for fees and once confronted promised refunds that have not been remitted. Please proceed with caution when dealing with this company as they do not have much integrity.
Leslie Grinnell
This company continued to debit our account for five months after we had switched to a different credit card processor. Their fax machine does not print cancellations, and they apparently do not pick up the mail at the P.O. box printed on their letterhead. Their contact information on their website does not match the contact information on their letterhead. They have refused to refund the$250.00 in fees they took from my bank account. They have not sent a local rep to mediate this dispute, and since I am in Massachusetts and they are based in Miami, I have no legal recourse.
Buyer Beware! I’ve switched to Heartland – approved by my local bank and with a local rep who handles my account personally.
Ilan
Did you resolve? I’m in a similar situation but they want $750!!!