Merchants rely more than ever on payment processors. But a lack of transparency and a complicated industry can leave them exposed.
A 2023 class-action complaint filed against Priority Payment Systems, LLC and Priority Technology Holdings, Inc. by plaintiffs including Braids R Us 305, Hawaii Rent A Fence, Inc. and American Security Fence Company, Inc. shows why merchants should closely monitor their processing rates.
Details of the lawsuit
The complaint, filed in the Superior Court of Cobb County, Georgia, alleges that Priority made misleading representations and omissions about its card processing services.
The plaintiffs claim Priority promised a low flat-rate fee but later charged additional fees that weren’t clearly disclosed. They allege those fees were charged after enrollment whether or not the related service was used. For many small businesses, processing fees are among their largest expenses.
The complaint also alleges that Priority used a network of independent sales agents to sign up merchants, and that many merchants didn’t realize they had entered a contract with Priority and Wells Fargo Bank, N.A.
The plaintiffs describe the alleged conduct as a nationwide “bait and switch.” They sought rescission, damages, restitution and declaratory and injunctive relief on behalf of the class.
Importance of monitoring rates
Monitoring your processing rates matters because it directly affects your bottom line. The industry involves card issuers, card networks, processors and member banks, and each can add cost.
You need a clear understanding of your fee structure and any extra charges. Without monitoring, excessive fees can go unnoticed for years, which can be especially damaging for small businesses.
Role of VeriFee
VeriFee helps protect merchants from hidden fees and confusing pricing. We review your statements, negotiate with your processor for clear and fair terms and help you find the right processing setup for your business.
We also continuously monitor your rates and fees so you aren’t caught off guard by new charges.
Potential implications
Whatever the outcome, the case is a reminder for merchants to read their agreements closely, question fees they don’t recognize and keep an eye on every statement.
Conclusion
Diligent rate monitoring is one of the best protections a merchant has. The case underscores the need for transparency and fair practices across payment processing.
Want a second set of eyes on your statement? See how VeriFee monitors your rates.
Related reading
Flat rate credit card pricing falls flat →
