Merchant Account provider overcharging

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Pengman
Posts: 115
Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Merchant Account provider overcharging

Post by Pengman »

I signed up with a major player for a Merchant Account in November and have just reviewed my very first transaction with them - they charged their commission at the Non-Qualifying rate which is more than double the Qualifying rate. Yet the transaction was an online transaction via Home Away so a 'Card Not Present 3D secure enabled eCommerce' Qualifying transaction IMO and certainly not a MOTO (mail order telephone order) or face-to-face non-qualifyiung transaction to which the Non-Qualifying higher rate applies. I know we're only talking relatively small sums here (an £0.83 overcharge in respect of this booking) but I'm assuming they'll carry on in this vein. I queried it with them on the phone today and the agent read a script to me, presumably because they think this justifies them ignoring our agreement and applying the higher rate. He said that if it was up to him he'd reclassify it, but he's not able to. I've now written to them formally asking them to reconsider and asking them for some reassurance that they'll charge me properly from now on - after all virtually all my future business is likely to result from similar transactions. I'll wait for their reply before deciding to name them and shame them, but from stuff I've read online something in my water tells me they're probably not alone in overcharging customers. Anyone else had this issue?
I came, I saw, I bought it.
newtimber
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Post by newtimber »

I'm rather confused when you say it was via Home Away, as they take their own payments. I don't think Home Away necessarily check 3-D secure etc. Every merchant account has different charging methods and you need to read what it says applies as Qualifying rate. Card-not-present transactions are usually higher.
Pengman
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Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Post by Pengman »

Thanks New Timber. I don't have an account with HomeAway, my account is with Eviivo and the funds from HomeAway bookings flow to my account via the merchant processing company that Eviivo recommended and who I signed up with (although I was free to choose another if I wished to). The definitions of qualifying card-not-present eCommerce transactions in the operating guide referred to in my agreement with this company, is '3D secure enabled eCommerce transactions submitted for processing within two business days of the transaction'. And the definition of non qualifying card-not-present eCommerce transactions in the same guide is 'Visa Consumer Charge Cards and MasterCard World Signia and World Cards'. I've been unable to find a definition of '3D secure enabled', but suspect it refers to the 3 digit security code on the back of credit and debit cards and would have thought that the online transactions millions of us do every day using the info on Visa and MasterCard cards, including the 3 digit code, via secure servers, are likely to to be '3D secure enabled' transactions - yes? To date I've been paid in respect of 4 such transactions where the guest has used such cards, they've all been processed the day following the booking (and therefore payment by the guest), i.e. within the 2 days, yet in all cases I've been charged at the higher non-qualifying rate. I've now written three letters to the merchant processing company claiming they're overcharging me and they're currently stalling, although they have promised me a response by 20th February. It'll be VERY interesting to hear what they say! My guess is that they're not alone and that most of us are being overcharged, most of the time.
I came, I saw, I bought it.
newtimber
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Post by newtimber »

3D secure is NOT the same a the 3 digit code on the back of the card. It is an additional security check specifically for online transactions and when a customer makes a payment, a box pops up and the customer has to fill in a password that they’ve chosen with the card provider.
Pengman
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Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Post by Pengman »

Thanks again New Timber. Yeah, I know what you mean - I have something similar with my card provider, except that I don't have to provide a password. But if you're correct, that means that transactions that are not 3D secure are not 'qualifying', nor are they 'non-qualifying' because they don't fall under the definition of non-qualifying transactions (i.e. they are not payment on Visa Consumer Charge Cards and MasterCard World Signia and World Cards). Will post again when I get a response from the merchant processing company.
I came, I saw, I bought it.
Pengman
Posts: 115
Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Post by Pengman »

On the 5th February I said I'd post again when I get a reply from the merchant processing company. They promised me a detailed reply by 20th Feb and by law they should have responded by this date (8 weeks after I first raised the matter), so I've raised the matter with the Financial Ombudsman Service. I'm convinced I'm being overcharged and I suspect many of us are. Will post again as this develops further. I haven't ruled out suing them either.
I came, I saw, I bought it.
Pengman
Posts: 115
Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Post by Pengman »

On 4th April I eventually received the detailed reply I should have received from the merchant processing company on 20th February. It wasn't particularly detailed though and basically said that they we're right to do what they'd done, that this was their final response and that they now considered the matter closed. So I wrote to the Financial Ombudsman the same day rubbishing their letter (which wasn't difficult because it was a load of rubbish) but of course the FO are now on a Coronavirus go-slow. But I'm like a dog with a bone with stuff like this though and they've not heard the last of this. Will post again in due course.
I came, I saw, I bought it.
Pengman
Posts: 115
Joined: Mon Apr 22, 2019 4:54 pm
Location: Portland, Dorset UK

Post by Pengman »

Today I heard back from the Financial Ombusdman's [FO] office (it took them a long time to address my complaint because of Covid). They advised me that, despite contacting my merchant account provider on three occasions (twice in writing and once on the telephone) requesting evidence of the cards used by my customers that justified the merchant account provider charging me at the non-qualifying rate, they had received no response. That didn't surprise me in the least - I always suspected that my customers had probably used bog standard credit or debit cards like 99.9% of us use, and not the obscure cards that would justify me being charged at the higher, non-qualifying rate. So my merchant account provider couldn't provide any evidence to justify that I'd been charged correctly, presumably because none existed.

On that basis the FO found in my favour and recommended to my provider that they compensate me, and the provider later rang me to confirm that they will do so (we've agreed a figure). Much more importantly though, the merchant account provider say they will be reviewing their procedures for future transactions. Call me a sceptic if you wish, but I'll believe that when I see it, because if they do this across the board and charge their customers correctly, as I see it they'll be reducing their turnover by something like 40%, and no company's going to do that unless they have absolutely no alternative. So I'll be watching them like a hawk from now on, and I suggest you watch yours too as I suspect this is endemic across the industry.

Nobody likes being ripped off!
I came, I saw, I bought it.
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