While I see thousands of disgruntled merchants across WHT and other online communities put in a very bad situation by Paysystems, I can NOT see any concrete legal action taken towards them despite their shameless business ethics (holding on to our money, selling/giving out our information to a third party without our consent) and careless attitude.

I am totally losing my faith towards their sincerity as I simply think that they will try to pull this under the rug and try to get away with it. I am ready to join any legal action initiated by members of this or any other community. Sending letters to their legal department at this stage is not cutting it and a more definite/ serious approach is required if we are to recover our owed funds. If they do not pull their heads out of their bottoms within the next 7-10 days and start settling out their merchants' balances, I will go out of my way and contact every single one of our clients (close to 1000) and get them to chargeback every single transaction that Paysystems has processed during the last 3-6 months. They dont' give a damn about their clients (US) so why should we ? I feel that we would have a better chance of re-charging clients and recovering funds then relying on their lies and unkept promises.

I do apologize for taking WHT'ers valuable time with this rant. I am very upset and unhappy about the way Paysystems handled this situation. It is not about the money anymore. I do not care about the funds that they are holding on to. They need to realize what it means to be in a crappy situation like this... :(

Regards,

Well you should not re-charge your clients - especially if Paysystems has already charged them & they are holding your money. You do not want to bring your clients into this mess. Plus you do not want your clients requesting chargebacks either. A lot of companies might request that you send them statements from your previous processor & all those chargebacks on there would not be a good thing

Totally agree, however hard it is financially we must make sure that our customers get a 1st class service as none of this is their fault.We have honoured all our contracts,even though we are struggling financially.Our customers will remember this and return to us.We advise everyone to do the same and please no chargebacks.

And also, if you make Paysystems mad, they might put you on the TMF list for excessive chargebacks. And if this happens, you might not be able to even get a processor.

The only alternative is to group together and proceed to a legal action. I know that HostPromoter has already joined us, but I invite everybody to do the same by going to this thread and send his/her info:

http://www.webhostingtalk.com/showthread.php?s=&threadid=312774

We will grant the clients what they have paid for NO MATTER WHAT. They deserve the quality service that they signed up for so we are making sure that they are not affected at all by this unfortunate situation.

I however will not let Paysystems get away with what they have done. I am pretty sure by terminating our agreement, they have rid us of any liabilities in relation to chargebacks. Other more experienced members can confirm or correct this if this is/not the case.

Regards,

Evn though they have terminated your agreement, chargebacks can happen. You would be opening up a big can of worms if your clients did all these chargebacks.

One, you have to contact them & have them fix a mistake / problem that was out of your control & theirs. Two, Paysystems can put you on the TMF list for excessive chargebacks & will then charge you a feww for each chargeback. Legal - yes. Ethical - no.

Go the legal way & don't try to turn this around on them. The legal way will be much better in the long run

Now I see PS has disabled the live chat support also in my control panel.

No communication, no status, no update.... just nothing.

I agree with Corey. Getting your customers to charge back all of their sales could make the situation worse for both you and them in the long run.

Taking the legal route is certainly one option that you could take and keep in mind - PaySystems apparently has made some payments already so perhaps they will be paying you in the near future for the funds owed outside of any reserves that are not yet due.

Don't get me wrong - your frustration and anger is completely understandable and you have already been damaged by PaySystems' actions and failures.

But we would just hate to see the situation made even worse for you and at this point - I do not know whether PS would or would not place you on the MATCH list if the above scenario played out with the chargebacks. Seems like a risk not worth taking, in my opinion.

I feel for all of you guys. I really do. I think hiring lawyers will just be another waste of money.

I don't think even with legal action anything can be done. I haven't seen the agreement you signed, but most Merchant Agreements have specific wording that will let the provider can cut off all service and hold funds without notice while not accepting liablity for any loss of business, etc. That allows them to cut off potentially fraudulent merchants.

There's usually a part about holdbacks and it says that they can hold back the funds from anywhere from six months to a year after any transaction. This is not to screw you over, it's to protect them from loss. With regards to the funds they're holding not in holdback, they'll can use the excuse that they're going to need time to sort out the financials, etc, etc.

Maybe a refugee can post the agreement that you signed so the pseudo-laywers can check it out?

I wouldn't recommend doing a chargeback, because you won't get any funds owed to you. However, I'm also not convinced that Paysystems could put you on the match list. You didn't sign up with any card association directly. You signed with paysystems. The card association doesn't know anything about paysystems merchant #1132123324, they know about paysystems.

And doing chargebacks will eventually screw them over, but at what cost? They are holding 5% of all revenue as holdback (give or take). If more than 5% of all transactions (by dollar, not by # of sales) get charged-back, then they're going to start to lose money. If this worst case scenario, the merchants with funds being held (not holdback funds) probably aren't going to get paid for quite some time. You might be screwing over the next guy over.

Who knows what they would do in that case? I suppoes it would depend on the agreement and if your money is held in trust with them or not.

Maybe Phil Fayer will sell his race car.

Originally posted by BooyaMcNasty
I feel for all of you guys. I really do. I think hiring lawyers will just be another waste of money.

I don't think even with legal action anything can be done. I haven't seen the agreement you signed, but most Merchant Agreements have specific wording that will let the provider can cut off all service and hold funds without notice while not accepting liablity for any loss of business, etc

Could be true, but I am sure their privacy policy doesn't allow them to sell our info to a third party (which they did), we can use this point to force them to give us our money. Our lawyer should simply ask them to release our money imediatly to stop us from going to the court, and if they refused, then the lawyer should make it clear to them that we will be filing a case for 3 things:

1. Keeping our money without legetimate reason.
2. Selling our info to a third party.
3. Misleading us for more than 3 days by keeping us waiting for them to solve the said technical issues, while they were preparing to close down.

We will use the above 3 points at least to get our money out of their pocket.

Aiesh

The agreement provides for them holding the reserve even after termination:


Upon any termination hereof, for any reason what so ever, PaySystems
reserves the right to maintain in its possession the Reserve Account any
and all amounts then held by PaySystems, or its agents, in relation to the
Client until such time as all actual and potential Returns, Refunds and
Chargebacks in relation to Customers have been settled to the full
satisfaction of PaySystems.

reserves can be held BUT not actual payments

also



You might be screwing over the next guy over



well said

so for now the only option open is fast legal action.

Originally posted by sprintserve
The agreement provides for them holding the reserve even after termination:

I agree we have signed the agreement

for small companies with less number of clients:

what if we email our clients and ask them to write a written letter to paysystems stating that there will be NO CHARGEBACKS whatesover for their respective transactions and ALL of their transactions are valid.

can we force paysystems to pay us the holdback funds ?

There is no question that what Paysystems has done has caused great harm to many merchants, but its important to remain cool, calm and collected.

Everything they have done is arguably within the terms of the contract you signed with them. Generally speaking, the terms of the contract aren't far off from every single credit card processing solution available today. That goes for actual merchant accounts and third party processors.

By no means am I saying what Paysystems has done is right. (hopefully other processors around the globe get a clue from this mess) But you must realize that their actions are not unique.

I advise to account for every dollar they owe you, keep those numbers in a safe place, then be patient and allow 6 months to pass.

Six months is a standard period of time for processors to hold funds once an account has been terminated. This gives time for chargebacks to flow in and allows them to determine the liability associated with your account. If you don't do anything crazy (like tell all of your clients to chargeback transactions), then you will likely see your money in about 6 months. (unless Paysystems files for bankruptcy, which is a real concern)

To every bad situation, there are lessons to learn. Positives can come from it.

1. Read and understand every word on a contract before you sign on the dotted line.

2. Educate yourself on standard practices of the credit card processing industry.

3. Use your anger and anxiety in a constructive way and move forward. This is only a speed bump in the road if you make the right choices. Make the wrong choices and you may find no road at all.

We can't control everything involved with our businesses. Things change and evolve, and we can't always forecast things to come. What matters the most for long-term success is how you manage problems as they occur. Your actions are completely in your control.

Be smart and don't let emotions run your business.

orderasap's post above is excellent.

Also, to address an earlier point by Booyamcnasty regarding whether or not PaySystems can place a merchant on MATCH - this depends on how PS accounts were structured at the time when all of this went down.

If they were operating as a registered IPSP and the merchants were sponsored merchants under this program, it might be possible. And unless there is a definitive answer to the contrary, I'd advise against doing mass chargebacks.

Lastly, one thing to understand about legal actions. Even if you feel that PaySystems has breached their agreement with you (and I sure feel that they have!), this doesn't mean that you can waltz in with a lawyer and expect to get them to capitulate quickly to you.

Typically, you will end up spending thousands of dollars in legal fees and if they wanted to - they could drag out the proceedings by many months or even years.

I'm in no way saying that legal action shouldn't be taken. I'm just saying that you should be prepared for the time & costs involved and be realistic about what you can expect.

You don't want to spend $3,000 pursuing a $1,500 amount owed, in other words. If the amounts are far more substantial, then it may indeed be worth it. Each situation is different.

Hopefully in the next six months, as long as PaySystems stays viable, they will make the reserve payouts to all affected merchants. I really wouldn't expect them to make any reserve payouts any sooner than as stipulated in their agreements.

And in the mean time, completing their payouts to the existing folks affected during the last few weeks.

something really strange has happened. My client who was charged in error (billing cycle was mistakenly set to 0) 14x has just charged back around $1400 and got his refund. On my paysystems account however I can't see any funds being taken from either the settled or the reserve funds.. A

ny ideas who actually paid his money back?

I'm very confused and a bit puzzled as to what the **** just happened

I am sure they will make you make good your obligations, and they will probably charge you $25 x 14 as welll....