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Credit Card processing scam: Cutting costs may lead to bigger loses

To buy or to lease, a debate we often have when buying a car, is beginning to surface in businesses’ minds regarding credit card processing equipment. Here’s what you need to know if the option of leasing credit card processing equipment is ever offered to you.

Recently, the Federal Trade Commission informed businesses of a credit card processing “deal” that may end in legal disputes and loses of money. Scammers appeal to small businesses by offering them the opportunity to lease credit card processing equipment, also stating that the business is able to withdraw at any time.

Sounds great, right? Or does it sound too great? If this were the case, it seems as though we would have more businesses taking advantage of this “deal.”

What often happens is businesses end up paying a multitude more for equipment they could have purchased outright for much cheaper. Then, as they try to get out the contract, it seems as though they are stuck in that regard as well. However, discontinuing payment does not help either – often the contract signee is held responsible – and such can lead to legal disputes.

Sounds like a headache, right? Yes, and while it may seem easily avoidable, some scammers are even disguised as the businesses’ current credit card processor to convince the business that they are just updating their current contract.

How to protect your business

  • Don’t rush into anything. Remember, good things take time and if this contract will actually save you money, you’re going to have enough time to make a decision you’re comfortable with.
  • Do your homework. Run an internet search with the company’s name to learn about its validity and reliability.
  • Get the contract, and actually read it. Make sure to have all components of the contract within your possession, and fully understand what it is offering you.

We all love a good deal, especially if it can help our businesses excel. But be skeptical with these scams and protect yourself from falling into something that could cost you time and money.

About Mike Wanta

Mike works on the Corporate Communications team at TDS and is the manager of the TDS Business Blog. He has a passion for all things business, storytelling, and teaching. Mike attended Edgewood College and earned degrees in English Literature and Journalism, while competing on the Men’s tennis team. He recently completed his Masters in Sustainability and Business. With his newfound free time, he plays music, tennis, and reads (a lot).

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