Merchant services scams can derail the success of your small business. By understanding how these schemes work, you’ll have the awareness you need to avoid fraudulent providers.

In this guide, we explore some of the most common merchant service scams and offer advice on how to shield your business from bad actors when selecting a merchant services provider. ‍

Common Merchant Service Scams

This scam is often difficult to detect and can potentially cause serious harm to your business. The fraudulent provider gains “backdoor access” to sensitive financial information from your customers and your business by changing the code of your .

• Then, they can commit identity theft and transfer funds to their own bank accounts. If this occurs, you could be held legally responsible for financial losses faced by customers.
• Fortunately, robust security measures can help protect your payment gateway from a backdoor access attack. You should always work with a PCI-certified merchant service provider that monitors your account for chargebacks and other red flags.
• You can also add a second layer of protection with an outside security service to scan your systems for viruses, malware and other weaknesses that could cause a breach.

Bait-and-Switch Sales Calls

This scam starts with an unexpected call or message that contains a recording. The speaker says they’re from your merchant service provider and that you’re agreeing to higher fees unless you respond right away. Alternatively, they might say you’re due for a rate review. Either way, the goal is to get you to call the scammer back.

Who Is Responsible for Merchant Service Scams?

It can be challenging to pursue the responsible party when you experience a merchant service scam. If your business has fallen victim to hidden fees, start with a careful contract review to see if your signed agreement mentioned these charges.

1. Sometimes, scammers skip talking about certain fees but put them in the contract. They might also charge you for items that aren’t covered in the merchant services agreement.
2. Unfortunately, you can successfully file charges for hidden fees only if you can prove the business intended to deceive you based on the laws in your state.
3. If you lose a large deposit to a merchant who goes missing, you likely have a legal basis for fraud charges.