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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 91048
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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I am trying to get out of a merchant solutions agreement with

Resolved Question:

I am trying to get out of a merchant solutions agreement with Velocity Merchant Services out of Downers Grove, Illinois to process credit card payments. I believe I have been the victim of this company's deceptive and unfair trade practices and have been trying to cancel my account with them since about May 6. I filled out a merchant application on March 13 and on March 14 signed a non cancelable equipment finance lease agreement with Northern Leasing for the credit card processing terminal. Northern Leasing sent VMS a charge-back notification regarding my account on May 3 after making one unsuccessful attempt to contact me about the payment. From that point I was literally hounded by VMS to give them my banking information. I found out from Northern Leasing Systems that they had cancelled my lease and agreed to issue me a refund for the partial payment they took from my account. However, VMS is now billing me $1439.52 for a credit card terminal that I only used twice during the training session they initiated/facilitated and that according to other industry experts is worth no more than a couple of hundred dollars. I never did any actual processing with the company and have been trying to return the equipment to them, but they have persistently tried to get me to retain them as my credit card processing company and to keep the equipment. Today, they sent me a bill for early termination fee of $695 and $70 past due processing fee. They sent me the original contract I electronically signed wherein on the back of the Northern Leasing Systems agreement in extremely tiny and blurry print under the section that talks about VMS' pass-through pricing there is some non-discernible text that mentions an early closure fee. I truly believe this part of the contract is intentionally concealed. The representatives from VMS bombard you during the sales process with calls. They double-team you with a supposed sales manager, who for some reason I could not get around when I was trying to contact customer service. And when they "land" the deal, they RUSH, RUSH, RUSH you to get the signed documents back to them within a minimal amount of time. My question is (FINALLY), am I stuck paying this? If so, how much should I reasonably expect to have to pay? I dealt with two other credit card processing companies (NPP and Newtek, and both allowed me to simply return the equipment to them and waived any early termination fee.
Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

The fact that you knowingly signed a contract that stated it could not be canceled is a big problem as courts enforce these contracts as written in most all cases. The exception to this rule is if you can indeed prove what you stated above about blurred or concealed or small hard to read text about the terms such that you can show their practices were unfair and deceptive. As this is a business complaint and not a consumer complaint, I am afraid you cannot go through the Attorney General as most times they will not handle business to business complaints and you will have to engage this company in a civil suit for breach of their contract with you as well as the unfair and deceptive practices and misrepresentation. I am afraid if you do not engage them and sue them, their collection agent will end up filing suit against you and pursuing you not only for the amount due, but ridiculous attorney's fees as well.

You need to read this contract closely however to determine whether or not they have put in an arbitration clause to resolve disputes and also if they have a choice of law/venue clause as you will have to follow those parts of the contract. Furthermore, if you are a business, you will need an attorney to represent your business in any legal action.

As far as what you would reasonably be expected to pay, that would be whatever the contract you sign states you agreed to pay in the event of early termination and absent proof of misrepresentation, breach and/or unfair and deceptive practices, I am afraid you are going to be held liable for any contract you have signed.



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Customer: replied 1 year ago.

The signed contract was with Northern Leasing for the equipment and they have cancelled the lease. If the lease company cancelled the agreement, why is the merchant solutions company still trying to get paid for it? Didn't the finance company give them their money up front, similar to if a car is financed the dealer has his/her money up front? Anyway, I can definitely prove that the information about the early termination language being visibly hard to read. Would you like me to fax it to you? It seems though that you are telling me that I will need to retain a lawyer in any event.

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your response.

If you have no contractual agreement at all with Merchant Solutions, then you would not owe them, but if you do have a contract with Merchant Solutions for services, then that contract would still be binding as I said above.

The finance company is not like a car dealer most times and usually they have a monthly payment arrangement with MS because the equipment is leased continuously on a monthly basis to the end of the contract.

However, regardless, if the contract with MS is vague (it is not possible for us to receive faxes or emails in this service I do apologize) or not capable of being read or is intentionally small and hard to read you would have to challenge them for breach and the unfair and deceptive practice.

Sadly, yes, it would require an attorney to represent your business to go to court to fight them over the money.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 91048
Experience: JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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