Credit Card Processor Fraud: Protect Yourself!

If your business processes credit and debit card payments, you should be more careful than ever to assure you are dealing with your credit card processor!

Last month, the Minnesota attorney general sued a credit card processor based out of Texas for misleading small businesses into contracts with hidden fees.

In Washington state, an independent ISO, Sphyra Inc., also misled merchants. Sphyra deceived merchants into signing contracts by acting as the merchants’ current credit card processors and talked merchants into leasing new equipment.

Frontline Processing and one of our valued merchants, Lazy J Motel, were also victims of a scam last month. An independent contractor of Central Payment out of California represented themselves as a Frontline Processing employee. The merchant then entered into a fraudulent contract with the independent contractor who then stole the merchant’s POS equipment.

“To have someone come in and blatantly lie to a merchant makes us in the merchant services industry look bad,” comments Richard Thompson, Customer Service Representative at Frontline. “Frontline Processing works hard to provide our merchants safe and reliable processing tools.”

Unfortunately, independent sales agents sometimes use deceptive or questionable practices when attempting to obtain new business.

 Card processor fraud red flags:

  • – Asking for account numbers or other sensitive information – Your credit card processor should already possess this information!
  • – Long-term contracts with hefty cancellation fees
  • – Overcharges
  • – Altered contracts
  • – No proper identification
  • – Suspicious behavior
  • – Signing a document to ‘get a quote’
  • – Rates and fees that sound too good to be true – A salesperson who claims they can offer ‘wholesale pricing’, for example, is being deceitful.
  • Hedging – Scammers may avoid your questions or openly lie.


Tips on protecting yourself and your business:

  • – Read all documents, especially terms of agreement, cancellation fees and terms & conditions – Skimming these legal documents can end up costing you money!
  • – Keep copies of everything you sign
  • – Get promises in writing. If a salesperson agrees to mitigate or completely forgo a fee, get the agreement in writing. Otherwise, it could be your word against theirs in the future.
  • – Ensure you are speaking with your credit card processor – Frontline understands safety and checking a salesperson’s identity is justified. Saving business cards is a good way to remember who you’ve worked with from your credit card processor.
  • – Do your due diligence and research the card processor
  • – Research pricing of the credit card processing industry
  • – Ask questions about cancellation fees, merchant agreement, terms & conditions, support, etc. 
  • – Don’t lease equipment unless necessary – buying is often a cheaper expense (upgrading to EMV chip card terminals is one of those necessary situations!)
  • – Understand interchange
  • – Never sign a blank contract!


If your business is approached by a sales representative that you are unfamiliar with, please feel free to contact Frontline Processing directly to verify their identity! You can call the number listed on any of your statements, the number listed on your terminal, or reach out to us at 866-651-3068.


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