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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
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Experience:  30 years of corporate, litigation and international law
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2 Question: North Carolina Businesses - Credit Card Merchant

Customer Question

B 2 B Question: North Carolina Businesses - Credit Card Merchant Services agreement - Bank, Wells Fargo has added a new charge on our statement that is disguised as a base Interchange charge titled : Interchange Clearing fee but marked as a service fee. As far as we can tell, they do not have the right to arbitrarily add fees. This fee amounts to $400 a month or about a .25% increase. We see this as a material change in our contract and would like to void it.
Submitted: 11 months ago.
Category: Business Law
Expert:  Maverick replied 11 months ago.

Welcome! My name is Maverick. Please give me a few minutes to analyze and/or research your inquiry and I will be back.

Expert:  Maverick replied 11 months ago.

Yes, the way to do this is to not pay the newly added fee [i.e. still pay the rest of the balance] and let them sue you for it. Of course, you may have to file dispute letters with the debt collector and the credit bureaus in the meantime. If they sue, you can defend on the grounds that you never agreed to this additional fee and thus you never breach by not paying it.

In the alternative, you can sue them in a declaratory judgment action and ask for a court order that renders the additional fee null and void; but the rest of the contract remains.

If you are trying to cancel the whole contract based on this additional fee, that may be hard to do since there is no breach per se; rather they have just proposed new term which you may decline to accept.

See law here.

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Customer: replied 11 months ago.
Thank you for your reply but I expected to be asked more questions if this was not understood.
In merchant services / credit card services, they charge their fees automatically and there is no vehicle to short pay.
When I asked this I explained that this was a Merchant Services account with a bank and hoped someone familiar with the process could advise me. Additionally, I believe that they have misrepresented the charge "as interchange" and that is a standard fee to all businesses that accept cards. By them calling an interchange fee it is mis-leading if not fraudulent.
Please let me know if you can add to this, other wise, I do do see the value in the response.
Expert:  Maverick replied 11 months ago.

I will let another expert try to assist you with this.

Expert:  Richard - Bizlaw replied 11 months ago.

Hello, my name is ***** ***** I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

What discussions if any have you had with Wells Fargo on this issue? Have you reviewed your existing agreement to see what discretion they have to modify their fee schedule?

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