David
Las Vegas,#2Consumer Suggestion
Sat, August 09, 2008
There is a common thread especially with regard to online stores that once processing had started, First Data begins assigning risk-based reserves to the account (the reserves do not generate interest to the client while in reserve). I believe what may be happening is that the sales rep who is signing the account and eager for an approval is likely understating the sales the business is actually projecting so that either average ticket size, number of transactions, or gross sales are understated. When First Data's underwriting department approves a client based on one set of assumptions and then the merchant's actual sales are well over those that led to the approval... and especially if the merchan't own personal credit would not support risk of client disputes, chargebacks, or monthly discount fees, the reserve is required up to the point of where the risk is calculated. In this case, about $138,000. It is also likely that since you have a minimum 3 year contract with First Data, you'll pay a termination fee of at least $500 or more to cancel service which will be deducted from your final ACH credit when funds are released. My advice to all is to ensure your sales rep is accurately reporting your projected sales and average ticket so your processing company can better estimate its risk assessment for your business should the business fail in some way. And as soon as you are approved, BEFORE you do any processing, call the processor directly and learn what your monthly or weekly caps are and the procedure they want you to follow in case your business skyrockets. Growing faster than planned is a good problem to have, but only to the extent that you can grow at a pace you can support personally and as a business.
James
St. Louis Park,#3Author of original report
Mon, July 07, 2008
This is the second update to the original report filed on June 20, 2008. On that date, I notified Cardservice International about the problem having our collateral returned by First Data Merchant Services. [Cardservice International was the sales team that signed us up with First Data Merchant Services for credit card processing]. My contact at Cardservice International forwarded the information on to Matthew O'Shea, VP Western Division Sales. Mr. O'Shea was able to arrange a mutually acceptable solution that allowed the balance of our collateral to be released. This was received and credited to our checking account on Thursday July 3, 2008. This was a rapid and positive resolution of our problem by Cardservice International.
James
St. Louis Park,#4Author of original report
Mon, July 07, 2008
This is the second update to the original report filed on June 20, 2008. On that date, I notified Cardservice International about the problem having our collateral returned by First Data Merchant Services. [Cardservice International was the sales team that signed us up with First Data Merchant Services for credit card processing]. My contact at Cardservice International forwarded the information on to Matthew O'Shea, VP Western Division Sales. Mr. O'Shea was able to arrange a mutually acceptable solution that allowed the balance of our collateral to be released. This was received and credited to our checking account on Thursday July 3, 2008. This was a rapid and positive resolution of our problem by Cardservice International.
James
St. Louis Park,#5Author of original report
Thu, June 26, 2008
Immediately after this report was filed, First Data Merchant Services returned one-half our collateral balance that they had been holding for 3 1/2 months.
James
St. Louis Park,#6Author of original report
Thu, June 26, 2008
Immediately after this report was filed, First Data Merchant Services returned one-half our collateral balance that they had been holding for 3 1/2 months.