Newtek Merchant Solutions Overview
CAPCO Program Controversy
Newtek Merchant Solutions (thesba.com, newtekone.com, newtekmerchantservices.net) is the merchant services division of Newtek Business Services, a New York City-based financial solutions company. Established in 1998, Newtek is often named as a central figure in a controversy surrounding CAPCO investments in multiple states over the past ten years. According to multiple reports (two of which can be found here and here), the company accepted tax credits from state governments as part of an agreement to create jobs and spur business growth within these states. The company has been criticized, though, for investing primarily in its own business ventures rather than non-Newtek-affiliated small businesses.
FTC Complaint and Resolution
Newtek was also the subject of a 2013 complaint filed by the FTC (Federal Trade Commission) which alleges that Newtek processed payments for a telemarketing credit card scam called TYS, or Treasure Your Success. According to the complaint, Newtek provided payment processing for TYS “without performing customary reviews (such as obtaining telemarketing scripts, as required by their own procedures) and despite clear warning signs of fraud.” Further details can be found here. The portion of the case related to Newtek’s former president, Derek Depuydt, was settled in November 2014. Details can be seen here. In May 2015, the a Florida district court ruled against Newtek in the case and ordered it to pay $1.7 million to the FTC. As a condition of the ruling, Newtek “agreed to a settlement permanently barring the company from processing payments for clients whom it knows or should have known: 1) fall into certain categories that have received close industry attention, such as debt relief services; 2) make misrepresentations to consumers; 3) charge consumers without their authorization; and 4) otherwise violate the FTC Act or the TSR.” It also requires Newtek to “put screening and monitoring provisions in place for use when accepting future clients.”
Newtek Merchant Solutions Location and Ownership
Newtek is a registered ISO/MSP of Westamerica Bank, Santa Rosa, California, and Merrick Bank, South Jordan, Uah. The company’s headquarters can be found at 1981 Marcus Ave, Suite 130, Lake Success, New York 11042. Newtek Business Services, Inc. is a publicly traded company (NASDAQ:NEWT) and should not be confused with NewTek, Inc., a San Antonio-based hardware and software company. Barry Sloane is listed as the president and CEO of Newtek.
Newtek Merchant Solutions Review Table of Contents
- Costs & Contract: Newtek offers a two-year contract through Redwood Merchant Services with a $295 early termination fee.
- Complaints & Service: Newtek has received more than 10 public complaints.
- BBB Rating: Newtek has multiple profiles with the Better Business Bureau and has received 6 complaints in the past three years.
- Sales & Marketing: Newtek appears to hire independent sales representatives and has received a few complaints about its sales practices.
- Rates & Fees: How Merchants Got The Best Rates With Newtek
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