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Old 3rd February 2010, 07:27 PM   #1

Join Date: Feb 2010
Posts: 2
Default Bank Of America/First Data Assault On Small Business

iMarinePower LLC is a small but successful small business founded in July 2009 with no outside capitol, no loans, no grants, and no taxpayer dollars. Our business grew as sales increased and we became known for our customer service. We provide a complete solution for Marine, Industrial and Automotive powertrain and drive components.

In our first quarter, we successfully completed a contract with the United States Government and continued to grow our commercial customer base. In late December we contracted 2 full time sales agents and in January we contracted another full time sales agent with the hopes of adding 5 more by the end of February to complete a successful launch of our Automotive Division.

Our business banking relationship for everyday business activities is with Bank of America. Initially, our merchant services account was held by a small company; but in reviewing our growth, we felt our merchant services would best be serviced by Bank of America since they knew our company. We felt this switch would help ease our book keeping. So we signed on the dotted line to have BOA handle our credit card transactions and Cybersource handle our gateway solution.

Initially, our transactions were processed quickly and efficiently, although the batches didn’t make sense on a daily basis, at week’s end the numbers added up. We were reluctantly pleased with our decision.
On January 26th, 2010 we received our last deposit of sales completed the day prior. Thursday, January 28th, a call to Bank of America revealed that our merchant services account was not handled by BOA, that in fact, First Data had subcontracted our account. Our funds were on hold for review and that the previous three days transactions would be released immediately to post to our account within 24-48 hours.

Monday February 1st revealed no deposits. First Data began to release part of the reasoning as they saw fit. Our account was under review by their security department because our sales were far above expectations. Our account was first approved for 600K in gross credit card transactions per year and January’s success put us on track for 1.5 million in sales. In order to have our funds, which by now approached nearly 40K, returned to us we had to provide a client list, tracking information and phone number for every customer in January. The audit process called for First Data to contact each of our clients to verify that we had, in fact, completed our contractual obligation. To add insult to injury, First Data somehow saw fit to charge us the processing fees for January and even charge our BOA account a refund to a customer whose funds are held by First Data, meaning we have refunded customer money that we don’t even have.
o date, iMarinePower LLC has not a single chargeback issue and has held itself to the highest customer service standards. We conduct great business and have repeat customers. Our small company has all but shut down as our advertising had to be suspended today. Payments we normally make to our vendors on the first of the month are late, putting our good name at risk. Every customer from last week that purchased from us now has a product for which we have no payment. The ripple effect from this disruption, assuming we can even recover, will take weeks and months to repair.

There are fundamental issues with the way this has taken place. First and foremost is we had no knowledge of our merchant services account being contracted to First Data and our contract is with BOA. Not that this would have influenced our decision, but its generally good business conduct to know by whom your company is being serviced. Secondly, I cannot possibly fathom the logic behind contacting all of our clients from January. First Data insist they will conduct themselves in a professional matter although that seems unlikely given the conversations I’ve had. We offered up immediately all the tracking information we had for each transaction which would provide delivery confirmation and a signature, but this was not sufficient. According to a First Data Manager, William J. Broger, if I refused to provide the phone numbers for all of our clients, he would freeze our account for 90 days while the transferred our merchant account off, then 180 days per Visa and MasterCard rules, and then another 90 days “ just because he can”. To summarize, should we choose not to have our business relationships jeopardized by having someone check up on us, they would hold our funds indefinitely to make us suffer further.

With the current economic state and unemployment at record highs, it seems counterproductive to me that our growing and employing small business is being attacked in this way. Without the resources we’ve established through our good business practices our company would be in grave danger. Unfortunately, it seems as though this is taking place within the limits of the law and our options are limited. Perhaps a small part of this is to blame for the current economic crisis. Perhaps we should re-evaluate these types of practices. With billions in stimulus dollars being thrown around and taxpayer bailouts costing us trillions, is it fair that a small business operating without these funds should be penalized in this way. Why is our cost of doing business so high when we’ve operated without the influence of corruption?

Matthew E. Prude
iMarinePower LLC
[email protected]

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Old 4th February 2010, 10:28 AM   #2

Join Date: Feb 2010
Posts: 1
Default We stopped doing business with those sacks of crap

FirstData: you can't get them on the phone, their reps have no idea what they're doing, dealing with them is luck.

Bank of America now hates small business even though the new CEO is from the small bus division.

It is really tough to be a small bus right now

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Old 4th February 2010, 01:23 PM   #3

Join Date: Feb 2010
Posts: 1
Default BOA did it to me also.

I started a small home based business also and used BOA's merchant services to process my credit cards. After 2 months of strong sales I was rolling along fine until I noticed the deposits stopped one day. I called BOA and thier excuse was the same. In my case I was not able to recover from thier actions and had to file bankruptcy. There are many companys out there offering credit card processing for small up and coming businesses. The procees fee is higher but no BOA.

Last edited by Logan; 4th February 2010 at 01:37 PM. Reason: removed linkdrop to heartlandpaymentsystems.com
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Old 30th June 2010, 01:32 PM   #4

Join Date: Jun 2010
Location: belmont shore, CA
Posts: 6

This is why small business and community banks are making a comeback. A customer needs someone that will come to them, talk to them, be there for them when these kind of issues arise which they most likely don't at the smaller institutions.

For instance, our bank doesn't have a 800 number. Our business bankers all have cell phones and the customers deal with them directly. Any customer concern or question isn't forwarded to some 24/7 support line. You talk with YOUR banker personally. And they come out to your business, something I don't see Bofa, Wells, Chase, City, or any of the bigger businesses doing.

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Old 30th June 2010, 05:20 PM   #5
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Location: Detroit, MI
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I understand and share your frustration. Hope you can resolve the issues quickly. When I used to own the business I had similar experience. The credit card industry is a big ripoff and needs to be regulated more closely.

I had written an article on how to reduce the credit card processing fees on my blog. Hope others can use the techniques to fight with credit card companies. You can find the blog post here - http://www.angelbusinessadvisors.com...ocessing-fees/

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Old 4th November 2010, 07:35 PM   #6

Join Date: Nov 2010
Posts: 1
Question BofA Merchant Service transfer to First Data not good for small businesses

I am stunned that no one has been complaining about being forced by Bank of America into a merchant service relationship with First Data, cleverly disguised as Bank of America.

I own two small businesses, each with its own merchant account, one opened in 1986 with a company bought out by Bank of America. Business #2 merchant services was opened with a different company then bought out by Bank of America. Now, Bank of America has joined in a "partnership" with First Data, and has transferred both of our merchant services accounts to First Data. Our first contact with First Data were with sales people relentlessly calling every day. When I called back I was told that we were not going to be compliant with the new equipment and was quoted a minimum $479 for the FD100, $539 for the WiFi version: that's $1000 for two businesses right off the bat. Finally they mentioned the FD300 multi-merchant for $623 (WiFi $658) but then I figure I'm locked into using FD's proprietary credit card processing software, if I buy their machines. And they seemed more interested in selling machines instead of finding solutions to my needs. (I found lesser priced terminals but not the FD300 WiFi without having to also sign up for another merchant account with a different merchant services vendor.)

Neither our Omni 3200 or Trans 330 (we currently use SoftPay) are compatible with the new BofA/FD software, so we have to purchase (or lease) new terminals, one for each business or go with one multi-merchant terminal (the FD 300 multi-merchant terminal retails at $622.00 while the WiFi version retails at $659.00 from FD). The lease terms run about $30/month for 48 months.

The FD customer rep told me that he would "honor" our current discount fees, about $25/month with $7.95 tacked on for AMEX for one business ($0.00 for the other, based on $12K mo sales 2.25% average discount fee per transaction). They assure us there will be no cancellation fees, or chargebacks (we've never had a chargeback in either business in the 24 year history of doing business).

We looked into their "online gateway" that is, logging into their secure site to process transactions: $199 set-up fee, plus card swiper (about $100) and $25/month. It's not just a matter of buying their terminal but also being locked into a relationship with a company that doesn't offer solutions for small businesses not operating exclusively from a retail location. The FD solutions don't meet our needs at all for two different businesses: retail location (dsl) plus on the road sales (not using a knuckle-buster). What this has done for us, has awakened us to the fact that our entire system now needs an upgrade, and not just in terminals with bigger data storage.

We use Quickbooks by Intuit and note they have a reasonably priced alternative with their gateways via PC web connection or cell phone: http://payments.intuit.com/products/...processing.jsp

But then, it's Intuit.

Incredibly disappointed with the tactics used by First Data/Bank of America. My businesses are small, but in a year, Bank of America does make between $3300-$3600 in fees off our sales. This years their intent is to pad that with an additional $625 to $1000 in terminal equipment sales as well.

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Old 6th November 2010, 03:41 PM   #7

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Location: North Carolina
Posts: 11

I would recommend dealing with a community bank or credit union whenever you can.

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Old 13th September 2011, 11:41 PM   #8

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Posts: 62

Bank of America had their own platforms that did everything. But, they were not able to run it as efficiently as they thought they could. So they ported all of their customers over the FirstData to be handled by not only FirstDatas platforms but the customer services and tech support as well.

FirstData has great platforms that many companies use. But, they are not very good at managing risk, customer service, tech support, and many other things. The managing risk part is what you had a problem with. They held your funds because you were growing faster than they thought you should or your ticket average was bigger than whoever signed you up put on the application.

Either-way you need to work with a payment processor that is happy that their accounts are growing instead of afraid of growing accounts.

I recently got a Very High volume Restaurant Equipment company that was having the same problem. They had random transactions for 30k, 50k, 100k, when someone paid for the whole kitchen build-out with their card.

Call the number below. I will make sure you are taken care of.

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Old 13th September 2011, 11:42 PM   #9

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Posts: 62

BTW, we provide equipment for free including payment gateways for website integrations.

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Old 27th October 2011, 08:52 PM   #10

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Posts: 1
Default The exact Same Thing happened to me with First Data!

Hi I am a mom home based business and the exact same thing happened to me that happened to i marine business owner. I sell baby and children items in my web site at poshbabystore. and sales were higher than expected and I have to pay my designers to process customers orders. Its a mess and I insist to work and talk to William Broger to fix this. They have money on hold and wont release it to the customers i refunded because i need that money to get paid some customers have already got their product but I have yet to be paid for the orders. I am upset and frustrated. I demanded they close my account and refund customer but i got the same comments i marine did. But i am trying to work with them to get that money back into my bank so i can finish to process all those orders i have outstanding. Customers are now fussy. I hate it when companies have no transparency and think they can do whatever they want. I will give a update lets see if they will come to a compromise with me. Here to hoping!!

I didn't work with Bank of America just First Data alone in house.

Note: They did close my account but now the system is showing I am a high Risk blah blah.......

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