Newtek Merchant Solutions Review

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

Newtek Merchant Solutions Statement Analyzer

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Products & Services Offered

  • Debit and credit card processing
  • Mobile phone processing
  • Web hosting and design
  • Gift and loyalty programs
  • Sales reporting
  • POS equipment

Types of Businesses Served

  • Retail
  • Mobile
  • E-commerce

Newtek Merchant Solutions Rates, Fees, and Costs

Key Points

Swiped Rate Variable
Keyed-in Rate Variable
Early Termination Fee $295
PCI Compliance Fee Variable
Equipment Lease Terms Variable

Newtek Contract Terms

The standard Newtek merchant contract (available below) is a two-year agreement through Redwood Merchant Services with automatic renewal for one-year terms and an early termination fee of $295. The merchant will also be subject to monthly and annual fees (which may include PCI compliance fees, monthly minimums, and variable transaction fees) as specified in a separate document that we are unable to obtain at this time. According to some merchant complaints, the company charges an annual “security fee” (possibly a PCI compliance fee) of $89.95, which merchants must opt out of to avoid paying. Although the company’s other fees aren’t clearly labeled in merchant complaints, multiple reviews cite hidden and unexpected fees charged every month by Newtek.

Fund Hold Complaints

A significant portion of the available Newtek complaints are filed as a result of fund holds. Like many processors, Newtek reserves the right to place funds in a reserve account in the event that a merchant incurs excessive chargebacks. Newtek does not appear to be abusing this policy at this time, but merchants should be aware that they may encounter fund holds when processing through the company and may need to take steps to force Newtek to release their money. See the Newtek/Redwood Merchant Services Merchant Agreement.

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Response from Newtek Merchant Solutions

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Newtek Merchant Solutions Complaints & Customer Reviews

Key Points

Total Online Complaints 10+
Live Customer Support Yes
Most Common Complaint Poor Service

Low Complaint Total

We have located over 10 negative Newtek Merchant Solutions reviews, some of which express concern that the company is a scam or a ripoff. Most of the available complaints appear to be the result of Newtek’s aforementioned affiliation with the TYS telemarketing scam. The remainder are split between complaints of undisclosed fees and claims of poor customer service, with difficulty cancelling the merchant account as a recurring theme. Although Newtek’s complaint volume is low for its size and time in business, the company’s recent FTC settlement and consistent complaint themes have negatively impacted its score in this section.

Newtek Merchant Solutions Support Options

Newtek offers phone and email support to its merchants. We have assigned the company a “B” in this section, but we do not consider it to be a top-performing credit card processor for customer service at this time.

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Response from Newtek Merchant Solutions

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Newtek Merchant Solutions BBB Rating Summary

Key Points - BBB

Product & Service Complaints 3
Billing & Collection Complaints 3
Advertising & Sales Complaints 0
Guarantee & Warranty Complaints 0
Delivery Complaints 0

Three BBB Profiles

The Better Business Bureau maintains three separate profiles that all appear to be related to Newtek’s services. The profile for “Newtek Merchant Solutions” currently has an “A-” rating, the profile for “Newtek Business Services, Inc.” currently has an “A+” rating, and the profile for “Newtek Technology Services, Inc.” has an “A+” rating. For the sake of simplicity, we will combine the data from all three of these profiles.

Under 10 Complaints

Newtek has received six total BBB complaints in the past three years, with three related to billing and collection and three due to the product or service. The company has successfully resolved three of these complaints, while the remaining three either were resolved to the dissatisfaction of the merchant or did not receive a final evaluation from the merchant. Newtek also has received five informal negative reviews from BBB users.

What Merchants Say

One complainant describes difficulty cancelling the merchant account and continued billing after account cancellation:

I have tried to cancel this account since SEPTEMBER. I switched to a local company, but have been refused multiple times. I was told that I was under contract and could not close it. I requested any info on my phantom contract and was hung up on. After that i could not get anyone to answer the phone when I called multiple times. After months of getting transferred and put on hold only to have nobody answer, i finally got in touch with a person named Yalian Vidal. She confirmed that i am not under any contract and just needed to sign and fax a form to cancel. 2/26/18 I received and sent it back a few days later. It is 04/05/18 All communication has stopped. I have been charged $41.95 a month SINCE SEPTEMBER.

Merchants stuck in a similar situation can benefit from knowing how to cancel an account without paying a fee.

An “A” Performance

In light of these figures, we agree with the BBB’s score at this time.

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Response from Newtek Merchant Solutions

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Truth In Marketing & Advertising

Key Points

Employs Independent Resellers Yes
Advertises Deceptive Rates No
Discloses All Important Terms No

Outside Sales Agents

Newtek appears to utilize independent sales agents and strategic partnerships to market its services. The use of independent sales agents is frequently linked to high complaint rates due to the lack of oversight and training these agents typically receive. In this case, we have located a handful of Newtek negative reviews that describe misrepresentation or nondisclosure by the company’s sales representatives, specifically with regard to the company’s “Meet or Beat” guarantee.

Incessant Sales Calls

In addition, a large number of online telemarketing complaints name Newtek as the source of constant, unwanted sales calls. This is most likely due to the company’s association with TYS, a telemarketing scam that was recently the subject of legal action by the FTC. Although Newtek did not operate this scam itself, its partnership with TYS has contributed to its being included in these complaints.

No Affiliation with the SBA

As a final note, the Newtek website was previously found at “thesba.com” due to the company’s use of the slogan, “The Small Business Authority.” Despite this former domain name, merchants should not confuse Newtek with the U.S. Small Business Administration, and the company’s homepage at one point explicitly stated that Newtek is neither affiliated with nor endorsed by the SBA. To its credit, Newtek’s website does not prominently feature any misleading rate quotes. If you suspect that Newtek is charging you undisclosed fees, we recommend seeking a third-party statement audit to find and eliminate hidden charges.

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Response from Newtek Merchant Solutions

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Newtek Merchant Solutions Logo

Our Opinion of Newtek Merchant Solutions

An Average Option All Around

Newtek Merchant Solutions rates as an average merchant services provider according to our rating criteria. The company is showing a low-to-moderate number of complaints and was recently the subject of FTC action as a result of its connection to a telemarketing scam. Newtek’s overall rating may be subject to change once more is known about its fee schedule, or once the BBB aggregates its three separate profiles for the company. For now, merchants should compare Newtek’s rates and service to the value offered by top-rated payment processors.

We rely on your feedback about Newtek Merchant Solutions to keep this review accurate and up-to-date. Please take a minute to tell us about your experience. We and the small business owners of this world thank you!

Thank you for reading my review. I hope that it has helped you with your research.

My Qualifications

I'm a former credit card processing sales director who left the industry to start my own a small business. From the time that I starting working in the merchant services industry to when I left to write about it, I've been on the pulse of payments for nearly 15 years. It didn't seem fair to keep this insider knowledge to myself, so decided to build this website to help you research which providers to use and how to save money on rates and fees. I've reviewed hundreds of companies, read thousands of user reviews, and learned the pricing tricks of every provider. If you have questions about credit card processing, you can find the answers here. Simply scroll to the top of the page to find the search bar. You can also message me if you need any guidance.

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7 Reviews Leave Your Review for Newtek Merchant Solutions Below

  1. Sebastian Bustamante says:

    DO NOT USE THIS COMPANY….
    Where to begin? This company has been a nightmare! Between the lack of internal communication and organization this has bee the worst business decision I have ever made.
    We applied for an SBA loan and a line of credit to help us with payroll and pay for equipment. The process was just a pain! They asked for so many documents and paperwork that we found ourselves working overtime to send everything in. The representative assigned to our case, which was a different person every day, was asking for documents that were submitted the day before, so we did double the work. They have zero organization skills and were unable to give a straight answer when we called in. Within the first month of the application process we had to make a payment. After six months of submitting documents and paying half of the equipment ourselves they decided to give us a closing date. They change the date week after week, then another four months went by with the excuse of new documents needed before closing. Finally, after waiting so long they finalized the closing date and time. without any notification a notary arrived at our office with no contract to sign and telling us that the contract was supposed to be overnighted to us to be signed the next day. After closing we had no idea that we needed to wait for a second process for the line of credit… again waiting and waiting while not been able to do anything or get additional funding. The following day we received a check to pay our vendor’s broker for the equipment. They check had a foreign address and the name on the check was not even the correct name, again this goes back to the lack of organization and communication. The loan office just told us to give the check to the vendor and let them deal with it. Our vendor tried to deposit the check and the broker’s account got close due to the foreign address and not having the full name on the check. We tried to call to get assistance and the loan officer just told us that he had no time for this and had too many cases to work on and hang up the phone. They had to recall the check. then they accuse of fraud and even try to intimidate us saying that an investigation was open because we didn’t do business with no vendors. they didn’t do anything even after they contacted the owner of our vendor which confirmed that we did, in fact do business with them. No check has been received and here we are still waiting for the check to be recall. Every time we called to get an update no one was able to give us an answer and just told us that an email was sent… there is no communication within departments and no one had an answer for us.
    Nothing was explained to us on how the process for the line of credit worked. They assigned a representative for the line of credit to “supposedly” help us with the process. However, she didn’t take the time to explain anything and just dump a bunch of information, talking extremely fast! And she has no patient at all. She then asks me to submit request on the portal they use, without explaining or showing us how to use it, when I ask her for help she just emailed an outdated guide which had nothing to do with the portal. Then after having all our client’s payments rerouted to them they decided to freze our account due to the “investigation” and we didn’t get funded, so we had no funds available and all of our client’s payments had been sent to them, so we had no money for payroll. We decided to terminate all relationship with them and sent out an email asking them for the next step to terminate. After three days of waiting they sent us an email with a letter showing a balance and a note stating “ we have decided to terminate our contract” then the representative assigned to our account sent an email to our client directly asking for status of a payments which was escalated to the owner of our client. This was just unacceptable in many levels… they were supposed to contact accounting not the owner. Apparently, our nightmare will continue until we receive a release letter.

    Please safe your time and money DO NOT USE THEM!

    From The Editor
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  2. Dell kim says:

    Newtek one is scam. The biggest scam. They promise sba loan. With $1300 deposits . And keep asking for endless document. After that they state your loan is decline base on the info that you given, and lack of document. Don,t fall for they sceme. Don,t ever deposit your money, or you will never see you dollar ever again. I implore you to take your business somewhere els. Read all review about this scumbag company. Don,t do it .


    From The Editor
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  3. Ross Barker says:

    So, Newtek is a fraudulent company that uses tax payer dollars to fund itself stolen from States CAPCO funds. Just do a quick google search and you’ll find out what I am talking about. The turnover at the company is ridiculous. I have been dealing with Newtek for several years, but now all of the good people that used to be able to help me are gone. I get tossed around customer service reps who are nothing but monkeys with no idea what they are doing. I asked them how they have been there and not one of them could say more than a few months. The old people I used to work with there are gone, and they probably jumped ship for a good reason. The only reason I stay with Newtek is because they locked into a loan probably funded with laundered money that would be too expensive for me to break away from. They do enough just to get by without me bringing my attorney in to get me out of this nightmare.


    From The Editor
    This Post Might Help: How To Get Out of a Merchant Account Contract

  4. Karen says:

    Not very helpful to loyal customers when the equipment you buy from them doesn’t work right. They send a lot of referb units and charge you for them. Customer service rating for lack of a better review F! The only thing good is their rates, but then again they charge you for lots of other items including referb processing units. Search long and hard before going with this company!

  5. Steve Green says:

    I’m a small one man wholesale business and do not take all that many credit card for sales during the year. Most of my customers get 30 days to send me a check. However as a convenience to my customers most of whom I know and do repeat business with I do take CCs. I have changed my credit card merchant processing companies various times over the years. Its always for the same reasons the fees and commissions creep up to unacceptable levels. Six years ago when I signed up with NEWTEK Business Services Corp Mike Wholean one of their employees promised me this would never happen with Newtek. Well over the years Newtek has enacted a variety of sneaky fees (not commissions as they say) that would add up to 5% more to the commissions they took from me. In the past when I have caught this they have refunded me these fees and sometimes not. They get away with it since I was a bit lax and am not always keeping an eagle eye on them. Well when I reviewed the last 6 months of my credit card transactions with Newtek I see that I was only getting 92% of the money I charged my customers. That sucked and I decided I had it with this company and closed my account. Good riddance Newtek.

  6. Matt Jones says:

    Newtek are scam artist. They have been taking a compliance fee of $30 for the past 5 months from me because supposedly im not compliant. I call the compliant company and they said that i am compliant and give me another number to call. Newtek says they will issue a refund then the next month i get they take the compliance fee out of my bank account once again. I have four 800 numbers that have been giving to me that they say to call and to correct this problem and the last one I get gives me the first 800 number i called in the first place. They hire out several different companies to deal with your account which all have access to all your bank records and all your personal information. Do not deal with Newtek. I have had nothing but problems since day one with them.


    Are you with Newtek? Learn how to resolve this complaint.

  7. Brandon Spaugy says:

    VERY UNHAPPY !! I have had to call or had my employees call NewTek many times in the last month to resolve issues. Just to install the new chip card terminal was supposed to take 15 minutes. Tried it twice and both times after spending almost 30 minutes on the phone had to abort to deal with customers who needed our help. Then had the representative come out and try. His name is Bill Eldridge. He has been handling our card terminal for a few years. It took him almost a full hour to install the new terminal. That was the last time we talked to Bill. He no longer answers his phone so we have had to talk to Newtek to get several issues dealt with. The last and final straw was getting a call from Newtek telling us today “10-17” that our terminal did not batch out on 10-7. Over a thousand dollars is not put into our account and they would try to recall the card numbers to resubmit. I asked what would happen if the cards didn’t go through as the merchandise is gone. The woman on the phone sais she couldn’t guaranty we would get our money. SO LET ME BE CLEAR, IF YOU HAVE A TERMINAL FROM NEWTEK THAT SHOULD BATCH OUT ON ITS OWN AND IF IT DOES NOT, THEN THEY COULD CALL YOU A FEW WEEKS LATER AND TELL YOU THAT YOU MAY NOT GET YOUR MONEY AT ALL

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