In the current age of digital transactions, merchants are increasingly reliant on payment processors. However, the lack of transparency and the convoluted nature of the industry can leave merchants vulnerable. A recent class-action lawsuit filed against Priority Payment Systems, LLC and Priority Technology Holdings, Inc. by plaintiffs including Braids R Us 305, Hawaii Rent A Fence, Inc., and American Security Fence Company, Inc., highlights the importance for merchants to rigorously monitor their processing rates and consider the services of payment brokers for safeguarding their interests.
Details of the Lawsuit:
Filed in the Superior Court of Cobb County, Georgia, the lawsuit alleges that Priority engaged in deceptive practices by making fraudulent representations and omissions regarding its card payment processing services. The plaintiffs claim that Priority promised a low flat-rate fee but later charged them additional fees that were not clearly disclosed. After enrollment, unforeseen and excessive fees were imposed on the merchants, regardless of whether or not the service was activated. Such fees have significantly impacted businesses, especially small ones, for whom processing fees are typically among the top three expenses.
The lawsuit also alleges that Priority used a network of independent sales agents to sign up customers, and many customers did not realize they had entered a contract with Priority and Wells Fargo Bank, N.A. The plaintiffs contend that Priority has perpetrated a nationwide “bait and switch” scheme by luring merchants in with false promises, and then overbilling them. The plaintiffs are seeking relief in the form of rescission, monetary damages, restitution, declaratory relief, and injunctive relief for the class of merchants affected by Priority’s alleged improper sales and contracting scheme.
Importance of Monitoring Rates:
Monitoring payment processing rates is crucial for merchants as it directly impacts their bottom line. The payment processing industry is inherently complex with multiple parties such as card issuers, card networks, payment processors, and member banks. It is essential for merchants to have a clear understanding of the fee structure and any additional charges that may be imposed. Failure to monitor rates can result in excessive fees which can be detrimental, especially for small businesses.
Role of Payment Brokers:
Payment brokers can play a pivotal role in protecting merchants from hidden fees and deceptive practices. These brokers serve as intermediaries between merchants and payment processors, and they can help merchants find the best payment processing solutions tailored to their specific needs. Payment brokers have industry expertise and can negotiate on behalf of the merchants to ensure transparent and fair terms. They can also continuously monitor rates and fees, ensuring that merchants are not blindsided by any hidden costs.
The lawsuit against Priority represents a challenge to the practices of a major player in the payment processing industry, and it could have significant implications for merchants who depend on such services. It’s a wake-up call for merchants to be vigilant and consider working with Payment Brokers who can act as a shield against deceptive practices.
As the class-action lawsuit unfolds, it’s imperative for merchants to recognize the importance of diligently monitoring payment processing rates and considering the services of Payment Brokers for safeguarding their interests. The suit underscores the necessity for transparency and fair practices in the payment processing industry.