Tuesday, July 30, 2013

State, federal agencies file scamming complaint against Spokane Valley credit card processor

Posted By on Tue, Jul 30, 2013 at 11:49 AM

State and federal agencies today filed scam complaints against a Spokane Valley-based credit card processing company, alleging the company repeatedly lied to small businesses about contracts, fees and services. 

Merchant Services Direct, which offers card processing services including fraud protections, has allegedly lied about service fees and manipulated contract agreements to jack up customer costs.

The Federal Trade Commission and the Washington state Attorney General's Office both filed separate complaints today about MSD's business practices.

“Scamming small business owners in Washington will not be tolerated,” state Attorney General Bob Ferguson says in a news release. “When businesses don’t play by the rules, the Attorney General’s Office will hold them accountable.”

The Federal Trade Commission alleges MSD deceived clients by cold calling businesses and posing as their current service providers, selling a new contract as a simple update. The commission's complaint alleges MSD then imposed illegal fees and charged businesses to cancel their services.

"Defendants' sales agents do not tell consumers about these additional miscellaneous fees in their sales presentations," the complaint states. "These miscellaneous fees also are not disclosed or are inadequately disclosed in the fine print pages of the contract that many consumers do not see before signing."

The Better Business Bureau reports Merchant Services Direct, now called Syphra Inc., made $7 million last year. The company operates in six states under several aliases. The BBB gives the company an "F" grade, listing at least 75 complaints in the past three years.

Both complaints name company managers Kyle L. Dove and Shane P. Hurley as the principals in the allegations. The company's website appears to have been shut down. An email requesting comment was not immediately returned.

The state and federal complaints seek an injunction to block MSD from continuing to operate and request refunds for improper fees charged.


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