Beware the Wells Fargo Merchant Account


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May 13th, 2009 by Chris

I’ve twice had a Wells Fargo merchant account. I should say the old adage holds true, fool me once, shame on you, fool me twice, shame of me. But I allowed myself to be fooled. Never again, nor should anyone else be fooled. Let me state clearly and firmly, avoid Wells Fargo merchant accounts, merchant services, etc. They have extremely shady business practices.

I first got a Wells Fargo merchant account with one business and after one year they jacked up the rate so I switched. Later when I was opening another business I got another account from them. I mentioned my previous experience and the guy said they would not jack up the rate or if they did I could cancel.

Wells Fargo you see operates with the classic bait and switch sales scam.

In truth my rate was jacked up, so I called the same guy who helped me last time Wells Fargo jacked up my rate increase, and together we set up a new account.

These were not small rate increases, these were large rate increases. Two totalling 0.8%. Which is huge. On $10,000 of volume in a month that’ll cost you $80, if you process more it’ll increase. It was going to cost me more. I was looking at an increase of a monthly fee of over $200 a month. What if your phone company could jack up your wireless rate in mid contract?

Wells Fargo claims that this increase was passed down from Visa & Mastercard. I don’t buy it. Why don’t I buy it? Because I have two merchant accounts, and my other one did get a rate increase as well at the same time. How much was my rate increase with the other account? 0.05%. Big difference.

So now, I call Wells Fargo to cancel, because why not? I’ve got another account already set up. They tell me I signed a three year contract and there is a $500 cancellation fee. I read the contract I have, the maximum cancellation fee is $200, and it was only if cancelled in less than 2 years, not 3. Are they rewriting contracts now? In addition to of course having their sales rep mislead me to originally get me to sign up?

Unfortunately I feel kinda stuck. Terms within the agreement limit my legal options, and terms within the agreement indicate that if I merely ceased using them it’d constitute termination. I don’t see how they feel they can change some terms without changing other terms. My only hope is pressure, if this post gets ranked high on Google they may cancel my account for me just to shut me up (and if you folks wanna link to this post to help, it’d be awesome). I’ll also be pursuing options with my state attorney general, and with the BBB.

In the meantime, let me recommend Mike Montefusco. mmontefusco AT banccard DOT com. He is the one who has twice helped me out after Wells Fargo jacked up my rate, and the merchant accounts he has gotten me have always had competitive rates and have never had their own rates jacked up by as much as .4% at one time like Wells Fargo. If you need a merchant account, contact him.

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Posted in: Ecommerce »  by: Chris

29 Responses to “Beware the Wells Fargo Merchant Account”

  1. Devon  Says:
    May 14th, 2009 at 8:21 am

    The BBB won’t help you too much, but if it can help discourage others from using that service, it doesn’t hurt to provide a low rating and talk to the local BBB rep and inform him/her about your experience.

  2. Chris  Says:
    May 18th, 2009 at 5:43 pm

    Despite the fact that I sell swords, I do think the pen is mightier. Someone from Well’s executive office closed my account and waived the cancellation fee. One of my complaints worked, yay me. The new merchant account will save me $100-$200 a month, and as the business owner, that goes directly to my pocket, thats almost a car payment.

  3. Chris  Says:
    June 17th, 2009 at 11:48 am

    My second complaint on another issue with their bank just worked as well.

  4. Fred Thornbury  Says:
    August 7th, 2009 at 8:33 am

    well i was just about to open an account at wells fargo but not now

    thx for the heads up

    and congrats on the Google listing it was 2nd just after wellsfargo link ;)

  5. Dan Pueppke  Says:
    September 8th, 2009 at 8:03 pm

    Does anyone else see the humor in the Wells Fargo Adsense ad at the bottom of the page? ;)

  6. bfa  Says:
    September 10th, 2009 at 10:55 am

    thanks for the heads up. I bank with Wells Fargo, so thought they would be a good bet, but after reading your post I won’t apply with them.
    BTW: ALL credit card merchant providers use deceptive, misleading sales people.
    I’ve learned the hard way that I need to read the entire contract.

    I had Nova, which switched to Elavon, through costco, who was the lowest of the lowest for fees and rates. but then they changed how they billed debit cards. which considerably increased debit transaction fees.
    Then they sent me a notice I needed to upgrade my terminal, saying they found one for me for only $300.

    So, I looked around and picked NAB(North american bancard)
    and the salesman said NOTHING about a 3 year contract (I read but missed that in the contract.) He told me verbally that it was a month to month contract, and that he would beat the total fees I’m paying or pay me $500.

    well Now,
    They tell me there is a 45 day free cancel period, but I didn’t get the first full month billing until the 47th day (from the time I APPLIED for the service, not when I started it.)

    Being persistent I was able to find a customer service supervisor who finally offered to extend the free cancelation period to 60 days.
    They also offered to match any other merchant services fees and rates if I FAXed the contract to them.

    BEWARE: the merchant service sales people are ALL deceptive and misleading.

    so no matter what they say: READ THE CONTRACT.
    I didn’t read it well enough.

  7. Ben  Says:
    September 16th, 2009 at 5:36 am

    I am a new business owner and I went with Wells Fargo Merchant. (BIG MISTAKE) There are fees that I am getting charged that I was not aware of. I tried to cancle my account but they also told me that I was in a three year contract and that I would have to pay $500 to get out. I feel like I’m stuck. It’s hard enough trying to start a business without a lot of money and I don’t need someone taking even more money when it’s not comming in. Wish I would have found this post earlier

  8. Jeff  Says:
    October 12th, 2009 at 10:05 am

    I’ve had problems with Nova (Elavon) and their PCI compliance fees. They claim I agreed to these fees in the application (it’s not there) and terms of service (TOS), which I never got. I need to find the version in place in the beginning of 2008 to prove I didn’t agree to this. bfa, do you have yours around still? Can you send it to me? jeff@cdalawyer.com

  9. Merchant Accounts  Says:
    October 23rd, 2009 at 2:09 am

    Hi, i like your blog, it’s so cool.
    And want to have a link trading with you, look forward to your reply.
    Thank you

  10. anonymous  Says:
    November 9th, 2009 at 8:58 pm

    wells fargo did the same to us. we were going to close the account because we were merging with a different business only to find out we were trapped in a 3 year contract. this was not disclosed to us when we signed up. After reviewing the contract, in really small print on the confirmation page it says ‘by signing you are agreeing to the terms outlined in the 42 page packet provided to you’ (this is general statement, not an exact quote). So we go look back in the packet, and literally, on like page 27, section 34.b, in 5 pt font - there are about 2 sentences about the long term contract. Seems shady they would bury this information instead of providing it on the main confirmation/summary page that you sign (this page captures all the other things…rates, purchase of the machine, authorized people on acct, etc. - everything except the length of the contract and cancellation fees).

  11. anonymous  Says:
    November 19th, 2009 at 5:06 pm

    We have recently heard of Elavon Merchant Services. If you are a costco member, there are some great perks to being with them. They offer a free machine and very competitve rates. You can get ahold of them at chris.barton@elavon.com

  12. Sarge  Says:
    November 25th, 2009 at 3:25 pm

    I am an insider, worked at a large bank merchant card services as a senior officer for 7 years.

    Some good posts here —

    Except the last post: Elavon is US Bank, another set of three card monte players in merchant services. Chris Barton or whoever you are, don’t come on this board and try to pimp your own services in the name of education. How about trying to develop some innovative products that have real value instead?

    If you folks want to check a couple of good ISO merchant card suppliers, google merchant account and review a couple that are coming up high in the organic rankings. They are there for a reason. (Elevaon and Wells are nowhere to be found)…

  13. JEANETTE MENDISZABEL  Says:
    December 3rd, 2009 at 4:19 pm

    Good point Sarge. I would also study the type of platforms that would benefit my business and negotiate from there opposed to accepting whatever my agent directs me to.Google articles involving the “how to’s” ( for merchant services) and description of platforms in order to save money. Also, be familiar with the interchange rates in use now to negotiate from a point authority.

  14. Mike  Says:
    January 12th, 2010 at 8:51 am

    If unhappy with Wells Fargo, bring your account to First National Merchant Services in Omaha, NE. aka. FNMS.

  15. Kristen  Says:
    January 15th, 2010 at 12:55 pm

    Its so silly to blame other people because YOU did not read the contract. And yes, Visa and Mastercard run the business, and they determine the fluctuation in rates. Every April and October. Google it. And yes, costco is the way to go if you are going to process. If you go straight through the processor, then you get standard fees. If you go through a third party service, then you get tacked on extra fees. If you go through Costco, you actually get competitive rates. 1.64 to be exact. I would never process with anyone besides them.
    The truth is, when you get a “free” terminal and rates that are lower than what visa and mastercard themselves, then you are being screwed. They will always get you with other fees. No processor gets for free terminals. Verifone and Hypercom never say “Here are a bunch of terminals to give away!” Processors pay for them, and they wouldnt give the terminals away unless they could recoop the money. But heres the thing. Even after the terminal is paid for, they will still keep charging you, and you will still see this as your regular fees. Why not just pay $400 up front for your terminal instead of paying extra fees like $20 minimum bill fees for the duration of your contract. Do the math. Its better to just pay for a terminal than to be in the dark about these outrageous standard fees that come with a free terminal.

    Thats what I like about Costco. Besides, the customer service is great. Not once have I spoken with anyone who does not try to relate to my situation. Before I knock any processing company, I would call them up and speak to them and find out the truth. Ask them straight up, “is there a cancellation fee?”, “If so, how much?”, “What if I need support after hours, can I contact someone to help me?”. If they say no, then ask for a contract. If it contradicts what they have said, then knock that company off the list. If they are dishonest about that, then they will be no good to do business with.

    And most importantly, READ THE CONTRACT!

  16. Al  Says:
    January 21st, 2010 at 11:03 pm

    I hear that an applicant’s credit rating has a lot to do with the rates that you receive. I’m starting an MLM where most of the transactions will be conducted over the internet. Can anyone direct me to someone who doesn’t require an A-1 credit rating?

    I already have a Point of Sale Merchant Account with Wells Fargo, but haven’t used it that much recently and have kept it active by paying fees. I did notice that they jacked up my minimum monthly fees recently by $5.00. Nevertheless, I’m wondering if I should go to them since I already have the POS account.

  17. Jessica  Says:
    January 23rd, 2010 at 8:10 pm

    This has been a nightmare and if anyone who has had a similar experience with these people is at all is interested in contacting me so we can figure out a way to take legal action against them… PLEASE DO!!!… vonbonbon.jewelry@gmail.com. Here’s my story…

    I am posting here because I have recently had a very similar experience with them… Mine was with a company owned by Wells Fargo called _erchant One. (Evidentally, my “contract” says I can’t use their name anywhere for any reason, so I will let you infer what the first letter is.) And I will hereby refer to them as M1. I started up a very small business and needed a credit card processor to handle my credit card transactions when I sold merchandise at events. M1 had the best rates and the customer service people seemed really helpful and nice.

    I asked very specific questions of the agent I talked to, including, “Can I cancel this service at any time or is there a minimum monthly commitment?” To which her reply was, “Oh no, there’s no contracts or minimum commitments, you can cancel at any time! No charges or fees for doing so!” I also asked, “Have you explained all of the fees you will ever charge to my account? Will I ever be charged anything in addition to what you’ve just gone over with me?” And again, she lied, “Nope! No more fees, just the basic fees I’ve talked to you about.”

    I said, “Wow, sounds great! Sign me up!” She said all I had to do was sign the “application” that she was emailing to me, and email it back to her along with my business account and bank verification forms. So I did. She specifically called this an “application,” not a contract. “Just a formality,” she said. She was even kind enough to fill everything in from her end before sending it to me so that I didn’t have to go to all of the trouble of reading it over. I did look it over, and in a couple of areas where I thought it was saying there would be extra fees, I asked her to explain it to me. She said no to worry, those fees were for store-front merchants and didn’t apply to me.

    About 2 months later, M1 withdrew $150 from my business account without notifying me or receiving my authorization. Unfortunately, they also tried to withdraw their regular monthly fees at the same time, and I didn’t have sufficient funds in the account. They then proceeded to add another $25 or $30 to my bill because my account was overdrawn. I didn’t even realize any of this was going on until I received notices from my bank telling me the account was overdrawn. My bank charged me 2 seperate $25 overdraft fees in addition to what M1 had just charged me.

    So… My monthly fees from M1, which should have only been $18, turned into about $225. Luckily when I notified my bank, they refunded my overdraft fees, and when I disputed the charge, my bank found in my favor and also refunded the $150 that M1 took out without my knowledge or authorization. The problem is, now M1 is sending me to collections for the $150 that they say they were never paid.

    I contacted M1 to find out what was going on with my account. They told me the $150 was for a PCI compliance fee and they told me where to look in my “application” to see where I had agreed to paying it by signing the “application.” I explained that there had been a mistake. The M1 representative that I had helped me set up my account had assured me that this section of the “application” didn’t apply to me because I was not a store front operation. Their only response was that they had no way of verifying what she had said to me, so I should refer to my application.

    I told them I wanted to speak with a supervisor. They said one wasn’t available, but that they would have her call me back. No manager ever called. I called them back a few more times, but to no avail. Each time I called, they became more aggressive and it even got to the point that the representatives simply stated that they didn’t have access to my account or my contract, so I’d have to go back to my copy of the contract to answer my own questions.

    I told them to cancel my account, I was done with them. They said no problem. “Wow, that was really easy,” I thought. The guy I spoke with said that he was going to email me a form to sign, stating that I wanted to close my account. All I had to do was sign and send it back. This sounds familiar, doesn’t it? I checked my email and downloaded the form. The form he sent stated that by terminating my contract, (which I was totally unaware I had even entered into a contractual agreement with them until this point), I would either have to pay $25 per month for the remainder of the contract, or a $295 termination fee.

    I called them back. “What contract?!?” I asked. “Your application was a legally binding contract,” he said. I asked what the duration of the contract was. He told me to refer to my application. I went back through my application, and found a section with fine print that said, “By its signature below, Client acknowledges that it has received the complete Merchant Services Program Guide. Client further acknowledges reading and agreeing to all terms in the Program Guide, which shall be incorporated into Client’s Agreement.” There was a website under this, and if you go to it, there is a copy of the Program Guide.

    The Program Guide is a 36 page document… on the 16th page of this document is a small section which says that upon commencement of this agreement, the agreement will last for 3 years. THREE YEARS. They flat out lied to me and tricked me into signing a 3 year contract. When asked why I was never sent a copy of the Program Guide either by email or regular mail as my contract indicated I would be, they responded that they didn’t know, I should have received it. Well I DIDN’T receive it because they never sent it.

    I called them back and told them I refused to sign anything saying that I would pay them either $295 or $25 per month for the remainder of my “contract.” $25 per month for the remainder of my contract = $1,400 by the way. He told me that if I didn’t send them that piece of paper, then they would not close my account. I immediately went to the bank and closed my business account so that they could not withdraw anymore money. I started receiving letters from them telling me they were going to send me to a collection agency. For all I know, they might still consider my account open and have it accruing monthly fees even though they have no way of receiving payment from me.

    This has been a nightmare and if anyone who has had a similar experience with these people is at all is interested in contacting me so we can figure out a way to take legal action against them… PLEASE DO!!!… vonbonbon.jewelry@gmail.com

  18. Ken  Says:
    January 27th, 2010 at 1:17 pm

    Sounds like Wells Fargo is as bad as Elavon (aka Nova). They’ve raised my rate and fees frequently over the years with no advance warning. I don’t know how much they’re taking until I get my statement, and it’s often more than the previous month. They now take nearly 10% of my sales with the high discount rate and high fees.

    They recently hit my account with a bogus charge. (I think it’s one of those “accidently on purpose” type of mistakes.) When I found out I called them and asked for a refund. They readily admitted it was their mistake, which it obviously was, but they won’t refund the money, not yet anyway, more than 3 weeks later. The supervisor I talked to when I first called them said he’d have it corrected within 48 hours. He lied. Now he won’t return my calls or e-mails. I’ve read a lot of horror stories on the web about Elavon since then.

    So Wells Fargo isn’t the only group of crooks in this business.

  19. Kristen  Says:
    February 1st, 2010 at 12:29 pm

    Ken, have you ever requested a rate review? Many processors allow you to request a rate review every so often and they will lower your rates. I know that Elavon is a company that does this because they have done it for me before. You might try doing that.

  20. dominee  Says:
    February 10th, 2010 at 1:45 am

    If you want to make it cheaper for your self tell the company that you want to be set up as IC+pricing instead of a fixed pricing. The “Shady” company will auto set as fixed pricing and charge you tons of fees on downgrade fees pending on the type of card that is presented. That way with IC+pricing you pay what the company pays visa and master card plus .15-.25 per transaction

  21. George  Says:
    February 13th, 2010 at 5:18 pm

    I am also screwed by Wells Fargo which continiously changes my rates. We are an online business and we are currently at 3.4% from the bank but get hammered by “Interchange fees” which bring that percentage to 6+ % depending on how busy we are. We process about $450000 in sales on a slow year so every percent counts big time. Are those Interchange fees standard?

    What do other feel about Paypal? They seem to have a flat 2.6% plus .10 per transaction and nothing else. Does that sound right or do they have other expenses too?

    I have friend with Elavon and they are also masters of the additional fees. My friend had to pay $50 per month for non PCI compliance when he does not even come close to the level of merchant that needs to be PCI compliant.

    I have been with Wells Fargo for over 14 yera now and I have not see a more greedy, fee hungry, and ruthless bank. What kept me there was my personal banker who from time to time stepped in to eliminate fees but recently only managers are able to waive fees and my branch manager is a moron that I would hate to ask favors from. As I am tired of handing them money I am getty ready to leave them and I have been so long with them that they ain’t going to be charging any cancellation fees…

    Cheers to all fellow merchants…

  22. Chris  Says:
    February 13th, 2010 at 6:45 pm

    Paypal used to have a horrible reputation, it is getting better though.

    And they have less fees so you know what you’re getting up front.

    One thing you have to worry about with paypal though is fraud. There are many horror stories about frozen accounts or other things.

    On the flip side, address verification for international customers is something they can do that a typical merchant account usually can’t.

  23. Bab  Says:
    February 14th, 2010 at 4:41 pm

    When I signed up to WF Merchant account they promised a free terminal reprog/local WF rep. A month later they hit my account with a $100.00 terminal reprog. fee. They also hit me with a $25.00 minimum fee plus all the other bs fees which bought the total to $40-50 just to have a cc machine. I am a small retail outlet. Now for the past 2 months I have a sign in my shop stating check or cash only. Not a single complaint so far. However, I just got a bill from WF asking for another $127.00 which they did not even explained for what, just a promise that I will be reported to the credit bureau. The worst bank ever.

  24. Red  Says:
    February 19th, 2010 at 11:25 am

    BEWARE OF WELLS FARGO MERCHANT ACCT! THEY HAVE MANY HIDDEN FEES AND YOU CAN’T GO OUT OF YOUR CONTRACT ONCE YOU SIGNED-UP. We’ve been fooled by the agent telling us that the charges were only $35 monthly fee for the machine lease plus transaction fees. We just found out that we still need to pay yearly fee, monthly paper fee for the statement, etc, etc.. REALLY HATE THIS COMPANY! IT’s A RIPPED OFF!!!!!!

  25. Robert  Says:
    February 24th, 2010 at 10:32 am

    I am also currently dealing with the $500 early termination penalty. I was told it was a one year agreement and was under that impression when I went to the branch to cancel the account. I admit I never read the approximately 35,000 word 42 page contract that would have taken about 3 hours, I went by what the branch employee told me. I have cancelled all my accounts at WF after being a customer for 10 years and will never do business with them again. I will also never pay their penalties and fees.

  26. Randall Hebert  Says:
    March 8th, 2010 at 5:33 am

    My wife and I have a small hair salon and process $7,000 - $9,000 a month with Wells Fargo. We have had their merchant service for about 6 years.
    In Feb 2010 the IRS emptied my account for a Tax Lien right at the beginning of the month while I had about $1500 in pended payments—- wells fargo bank pays the IRS instead of my pended items(it was pended over the weekend), refuses to pay the pended items so that they could run all the items thru NSF 3 times. They charged me about $2,000 in NSF over 3 weeks.i HAVE BANKED WITH wELLS fARGO SINCE 1989.
    The merchant service bills me in 4 charges each month so that when they ran it thru 2-3 times, wells fargo bank collected $140 each time and the merchant service charged equal NSF charges. The merchant service THEN,when I had the NSF roller coaster at an idle, the merchant service changed the collection date from March 8 to March 1 when I have a number of items on auto-withdrawal— there was no notice of the collection date change. This set off another round of NSF around $500 this time.

    I will be cancelling my personal,business & merchant service with Wells Fargo this week.
    It sad state of affairs when a business does not value a 20 yr business relationship.
    Randall

  27. Ronnie  Says:
    March 9th, 2010 at 10:27 pm

    Most if not all of the merchant services companies are charging the merchants on what is known as “tiered” pricing. I won’t go into bashing the competition here, all I ask is that if you are serious about finding true transparent merchant services please read my blog. From there you can also find links to our website.

  28. rashelle  Says:
    March 11th, 2010 at 6:28 am

    wow i just got a call from Merchant services and they offered me a job. Selling their product they offered me a 9,000.00 sing on bonus and that they would fly me to sunny Calie for training. After reading all of the shady dealings I will be sure not to fall for it. thanks, rashelle

  29. Brian  Says:
    March 18th, 2010 at 7:28 am

    As a few others have pointed out, “interchange plus” or “interchange passthrough” is the way to go. With interchange plus, you know exactly how much you’re paying to the processor. Interchange fees are fees that get paid out to (a) the card issuer’s bank and (b) the Visa/MC card associations. Interchange must be paid no matter who the processor is. With tiered pricing, interchange is paid out of the collected discount fees. With “interchange plus” pricing, the interchange fees are merely passed through to the merchant and the merchant pays the “plus” part which is known ahead of time. In my experience, most merchants can save 0.5% - 1.0% (or more in some especially egregious tiered pricing situations) by switching to interchange plus.

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