So you are a small or even medium size merchant and trying to start your business. You go looking around for a merchant account and you find someone you think you can trust. A few days later and $1,000.00 spent and that trust is gone, along with your “deposit” or “processing fee”.

Over the past week, I’ve received numerous emails from small merchants complaining about just that. They were taken in by some fast-talking merchant account website or salesperson and now found themselves with no merchant account.

Just a few tips that may help the next new merchant from becoming a victim. These are things to look for when looking to work with a merchant account provider. If you come across any of the following, you should run like the wind or just click away to the next site:

1) The company website doesn’t provide a physical address.

2) The saleperson uses a free email provider, i.e. gmail or hotmail.

3) The company asks for payment upfront claiming it’s a “setup fee” or “processing fee”.

4) The salesperson wont tell you what banks they work with. The common argument is “we work with a lot of banking partners” and if that’s the case, just ask for one where you can verify the company independently.

5) High pressured sales. Merchant accounts and “great deals” aren’t going anywhere. Never feel that you need to be rushed into anything by the merchant account provider.

6) They ask for “PCI Fees” or “Security Fees” Ultimately, any fees upfront are just wrong but especially fees that the provider is claiming is due to security requirements by the card associations. There are no such things.

7) The company provides you with a generic application form (no reference to the banks or their company) claiming that it’s an “introduction” form to get you placed with “multiple” providers.

8) There are major problems with their website or it appears to be incomplete. While everyone misspells a word on occasion or gets a phrase wrong or even accidentally deletes a web page, the website should at least try to come off professional. Don’t buy into “we are re-releasing it”.

9) There is no reference of the company online. Kudos to the new guys, but when it comes to your merchant account, don’t waste your time with the new guys. While everyone starts somewhere, let someone else be the “test case” as it’s your business and you don’t want to put it in jeopardy. When searching online, please keep in mind that at one point or another, every company has complaints about them, it’s the nature of the beast; the trick is to look past the one or two unhappy clients and see what people are really saying.

10) The domain is registered to a domain proxy service or has been very recently registered. This is an easy one that people often overlook. When working with a company, do a whois on the company first, try Network Solutions - from there, try calling the number you find and see who answers. There is absolutely no reason for a company providing any type of financial services to not provide their real information, in fact, I think it should be a legal requirement but that’s another story.

I know I am going to get flamed for this one, but here are just a few names from the recent reports. Please remember however, just because a few people had a bad experience, doesn’t mean you will, however the trend can be your friend. Also, just because they aren’t on this list doesn’t mean they are safe, the best word of advice is use common sense and if it feels shady, it probably is.

Beware of the following:

High Risk Merchant
Intabill
National Small Business Alliance
E Merchant Direct
Merchant Plan B - * Site Down

Please note that the above mentioned companies “may be” legitimate companies, I’ve only dealt with one of them so can’t really speak from experience but I can say that I’ve read or at least seen two seperate and independent reports for each company listed.