Agree with our rating?
Leave a comment below
Agree with our rating?
Update 1/9/2019: Sphyra no longer appears to be an active brand. Google is reporting that Sphyra has closed its Spokane, Washington location, and the company’s Facebook page has been deleted. The Sphyra website is also inactive. Four of Sphyra’s managers are now working together at a company called RedFynn. See our RedFynn review for more information.
Sphyra (sphyra.com), also known as Merchant Services Direct, is a Spokane, Washington-based merchant account provider with several alternate business names on file with the Better Business Bureau. As of this update, the BBB lists “Boost Commerce,” “The Home Office,” “The Direct Processing Center,” and “World Wide Solutions Systems” as active DBAs of Sphyra, although the relationships between Sphyra and these companies are not specified. It could be that these are sub-ISOs of Sphyra, or they might be unrelated ventures.
The most noteworthy DBA of Sphyra is Merchant Services Direct LLC. This appears to be the name under which Sphyra formerly operated, but the old website for Merchant Services Direct (msdmerchants.com) is no longer active. This probably has something to do with the fact that Merchant Services Direct was the subject of legal action by the Federal Trade Commission and the Attorney General of Washington in 2013. The FTC and the Attorney General’s office sought action against Merchant Services Direct for what they alleged to be “a pattern of false and unsubstantiated claims” (including slamming tactics) being made by the company’s sales team. This was an uncommon case within the credit card processing industry, as it sought damages from a company based on misrepresentation of transaction rates and lease terms by its independent sales agents (ISAs). As of this update, both legal actions have been settled. Merchant Services Direct has been ordered to pay a total of $175,000 in damages to federal regulators and the state of Washington, and the company’s owners are prohibited from using deceptive sales tactics going forward.
For the remainder of this review, we will refer to the company as Sphyra, but some of the business practices we describe are also likely to have taken place when the company was operating as Merchant Services Direct.
Sphyra Customer Reviews
Here's What Their Clients Say
|Total Online Complaints||40+|
|Live Customer Support||Yes|
|Most Common Complaint||Sales Tactics|
Sphyra offers a dedicated phone support line on its website in addition to an email form. If we include Merchant Services Direct complaints, there are over 40 negative Sphyra reviews on various consumer protection websites as of this writing. Complaints mostly mention the sales and marketing tactics addressed in the above sections, but some also cite a lack of available customer service representatives, including a tendency for Sphyra sales agents to disappear from the company after a short period of employment. Sphyra has been very active in responding to complaints on these forums, but it’s unknown whether complainants ultimately received a satisfactory resolution in these cases. For now, we assign Sphyra a “D” in this category.
Sphyra Online Ratings
Here's How They Rate Online
|Product & Service Complaints||35|
|Billing & Collection Complaints||7|
|Advertising & Sales Complaints||9|
|Guarantee & Warranty Complaints||0|
As of this update, the BBB is giving Sphyra/Merchant Services Direct a “C-” rating, citing 51 complaints filed against the company in the past 36 months and the FTC lawsuit. Of the 51 complaints, 35 are related to the product or service, nine are due to advertising or sales issues, and seven have to do with billing and collection. Eight of these complaints were not resolved to the merchants’ satisfaction, with one of them receiving no resolution whatsoever. There are also 15 negative informal reviews posted to Sphyra’s BBB profile, but it should be noted that these reviews are not subject to verification by the BBB. In this case, we agree with the BBB’s rating for the company.
Sphyra Fees, Rates & Costs
A Closer Look at The Contract
|Early Termination Fee||$250-$350|
|PCI Compliance Fee||Variable|
|Equipment Lease Terms||Variable|
Sphyra’s website includes a link to a Merchant Program Guide (available below) that appears to outline a number of Sphyra’s contract terms. The guide refers to iPayment and First Data as the processors for Sphyra merchant accounts, and the terms outlined therein describe a three-year agreement that automatically renews for one year following a cancellation window of 30 days. The early termination fee is $350 for merchants who cancel within the first year of the contract, and it is reduced to $250 for merchants who cancel beyond that point. Complaints filed on other consumer protection sites also indicate that the swipe rates quoted by sales agents are usually much lower than the effective rates actually paid when services are rendered. The program guide does not list any specific terms for equipment leases, but merchants should keep in mind that it is common for equipment contracts to also lock signees into an equipment lease for which the cancellation conditions may or not be clearly disclosed. These equipment leases usually come with early termination fees of their own. See the Sphyra Program Guide.
Sphyra Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Sphyra appears to utilize telemarketing and independent sales agents to market its services, which is the primary issue cited in most complaints about the company. According to the FTC lawsuit, Sphyra telemarketing agents (who were at the time employed by Merchant Services Direct) would call merchants, unsolicited, and lead them to believe that the telemarketing agents were representatives from the merchants’ current processors. They would then set an appointment with the merchant for an in-person visit from a Sphyra sales representative, who would inform the merchant that Sphyra could not only offer them lower rates than their current processor, but could also provide them with up-to-date equipment to replace their no-longer-compliant models (a process known as “slamming”). These statements, in addition to other misrepresentations, are alleged by the FTC to have been either deceptive or completely fraudulent in most cases. In fact, Sphyra’s marketing tactics even caught the attention of a Spokane news station (KXLY), as you can see in the video below.
This is consistent with the issues cited in most publicly available complaints about Sphyra. Most complaints mention nondisclosure of contract terms, deceptive rate quoting, and sales agents posing as the merchant’s current provider. Remarkably, these practices seem to be fairly common among companies that utilize independent sales agents, and Sphyra just happens to be the only company that is currently the subject of prosecution for using these tactics. Regardless, we are of the opinion that the volume of complaints regarding this company’s deceptive sales tactics merits a “D” in this section.
Copyright © 2023 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. We may earn revenue if you obtain services from a provider that we recommend. See this page to learn how we support our operations.