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Leaders Merchant Services Is Leading the Way With Hidden Fees

In our ongoing series of exposing the trickery of merchant account companies, we decided to contact Leaders Merchant Services to take a look at what they offer. With a quick Google search, youll see that they advertise under the url rockbottommerchantaccounts.com. They want you to think that youre getting rock bottom rates when, in fact, youre getting a bottom of the barrel deal. Leaders Merchant Services is one of the worst examples of trickery weve ever seen.

TRICKERY EXPERIENCE #1

We initially contacted them through their online form to request a quote. A representative responded with a prompt email requesting more information. After I indicated that I was looking for the ability to process credit cards for items sold through a website, he responded back with a simple listing of rates and fees (click the image of our email exchange to the right). Heres what they emailed us:

The total fees for our service are as follows: Monthly Gateway Fee: $15.00&#8232; Monthly Customer Service Statement Fee: $7.95&#8232; Batch Fee: $.35&#8232; AVS Fee: $.10&#8232; No Annual Fee&#8232; No Application Fee Visa/MC Rate: 1.79 percent&#8232; Discover Rate: 1.99 percent&#8232; Amex Rate: 3.50 percent&#8232; Transaction Fee: $.22

Notice the term total fees. If I were a merchant looking for a credit card processing, I would assume that this is what Id be paying for all my transactions. I would assume that all my transactions would have the rates noted for Visa, MasterCard, Discover, and American Express. (When we actually received the contract, we find out that they offer threetier pricing the worst possible merchant account for a small business.) Leaders Merchant Services is simply tossing out the bait hoping that well bite.

When I noticed that he didnt include PCI Compliance, I asked him if there was an additional fee. He immediately emailed back and apologized for not including it. Do you really think he forgot about a $69$129 charge? Or, do you think he was instructed by his boss to leave that out because it might scare new customers away?

TRICKERY EXPERIENCE #2 A few days later, we received a marketing email from Leaders Merchant Services offering a promotion for the month: Monthly customer service fee is only $4.95 a month. Swiped rates are 1.09 percent .27 cents a transaction for larger transactions. Swiped rates are 1.39 percent .18 cents a transaction for smaller transactions. Keyed/Internet rates are 1.79 percent .22 cents a transaction. Free Terminal! There�s just a one time fee for shipping, handling programming of $45

WOW a promotion  sign me up! I noticed theyre now trying to lure me in with different rates than they offered during my first trickery experience, so I requested the paperwork in order to take a look at the fine print. When the email with the contract arrived, it included the following text in the body:

No application fees No set up fees No annual fees No monthly customer service fee No security monthly fee

I was excited to see that they were offering me such a great deal, and I couldnt wait to open of the attached file to take a look. When I opened the contract, I WAS SHOCKED BY WHAT I READ! Download the contract at www.bestmerchantrates.com/TrickeryofLeadersMerchantServices.pdf and walk through the trickery with me.

Six Critical Reasons to Avoid Leaders Merchant Services: 1. They will give you threetier pricing! (page 3) As Ive mentioned previously, threetier pricing is the worst option for small businesses. If youre not familiar with what threetier pricing is all about, click here for a quick lesson. Although they initially emailed us with a simple rate structure, now theyre finally telling the truth! On page three, youll notice the + sign next to MidQual Rate and NonQual Rate.When a customer is using a rewards credit card or if the card is keyed into your cash register or computer instead of being swiped, plan to get charged the MidQualified Rate which is .60 percent + 1.79 percent. And, when your customers gives you a corporate credit card, when a customer�s address and zip code don�t match what�s on file, or when your sales aren�t sent through the terminal within 24 hours, youll be charged the NonQualified Rate which is 3.99 percent + .60 percent. They failed to mention all of this in their initial bait and switch marketing to us.&#8232; 2. They are locking you into a 3year contract with a $350 termination fee. (page 4)&#8232;By signing this contract, we would have been locking ourselves into a threeyear contract. Heres what the fine print says: If Merchant is approved, any cancellation by You of this Agreement within three (3) years from the date of approval or is terminated by Servicers due to an Event of Default by Merchant, will be subject to the applicable early termination fees and Merchant will be charged a fee for such early termination equal to (i)$350.00 if terminated before the completion of the first year of the Term; or (ii) $250.00 if terminated after completion of the first year of the Term but prior to end of third year of the Term (see section 22.1 of the AgreementProgram Guide). If we cancel in the first year, were charged a $350 termination fee. If we cancel after the first year, we would be charged $250. They failed to mention all of this in their marketing to us. Do you really want to be locked in for 3 years?&#8232; 3. They disguise their setup fee as a Business Information Verification Fee. (page 4)&#8232;Remember how they said there was no setup fee. Take a look at page four, and youll see a $25 charge in the fine print.A $25.00 Business Information Verification Fee will be assessed to Merchant within thirty (30) days of Merchant Account being approved.&#8232;Of course its not a setup fee, we just need to verify that youre a legit business. Great disguise!&#8232; 4. They charge a $4.95 regulatory fee. (page 4)&#8232;What is that all about? Whats getting regulating and who is that money going to? We can tell you one thing...youre bank account is getting regulated at $4.95 a month. What are you getting in return?.&#8232; 5. They automatically enroll you in Premier Customer Care for $12.95 per month. (page 6)&#8232;Remember how they said no monthly customer service fee in the email that came along with the contract. BOGUS! Look at whats in the fine print:LEADERS automatically enrolls all of its merchants in its Premium Customer Care (PCC) program. This program provides merchants with: (1) a lifetime warranty under the same terms as the manufacturer�s warranty on our leased or purchased equipment, (2) LEADERS� inhouse Technical Support from 6:30 am 6:00 pm PST, Monday through Friday, (3) free terminal supplies (including shipping), (4) discounts on peripheral equipment and, (5) free loaner equipment for up to 30 days during warranty repairs on leased or purchased equipment. Call 18775383377 and ask for the Installation and Training Department for all your PCC needs. The cost of the PCC program is only $12.95 per month (debited at the beginning of each month) and it WILL save you money! They hide their Premier Customer Care (PCC) in the fine print and assume you wont read it. In order to optout of this service, you have to check the box on the lowerright corner that says PCC NO. Seriously? Do you really want to work with a program that hides a fee for customer service in the fine print?.&#8232; 6. They only offer a $100 onetime bonus for a referral. (page 7)&#8232;Although $100 is a nice pat on the back, Im not really sure that its going to help your business on a monthly basis. You need a referral program like no other. leaders merchant services

In all our research, weve never found a worse case of trickery than in the case of Leaders Merchant Services. Their initial email provided minimal information, and they portrayed themselves as a full disclosure company. In reality, they hide their outrageous threetier pricing and disguise their fees in the fine print. You must know that there is a better option.

AUTHOR RESOURCE BOX: Danny Choi is the Founder and CEO of Best Merchant Rates a merchant account provider that actually cares about small businesses. Founded in 2005, Best Merchant Rates exposes the trickery of merchant accounts, educates on the truths of credit card processing, and empowers with transparent pricing.