The Federal Trade Commission today took action against payment processing company First American Payment Systems and two of its sales affiliates for trapping small businesses with hidden terms, surprise exit fees, and zombie charges. The FTC alleges that the defendants made false claims about fees and cost savings to lure merchants, many of whom had limited English proficiency. Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent, and made it difficult and expensive for them to cancel the service. Under a proposed federal court order, the defendants will be required to return $4.9 million to harmed businesses, stop their deception, and make it easier for merchants to cancel their services.

“First American lured small businesses in with false promises of low costs and an easy exit, and hit them with surprise fees and illegal charges when they tried to get out,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s order returns millions to merchants, bans unauthorized billings, and makes it easier for customers to cancel.”

Texas-based First American Payment Systems provides payment processing services across the country, which it markets through its affiliates Eliot Management Group and Think Point Financial. They market their services to small- and medium-sized businesses who rely on credit cards, debit cards, and checks as a way to accept payment from their customers. Payment processors generally...

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