I finally created a login for WHT because I desperately need your help.

Roughly $8,300 of transactions are being held by Charge.com/Pipeline Data under a "risk issue". We had no charge backs, and did not exceed any monthly limit/per transaction amount. We are a small company and having this much cash flow put on hold is killing us.

A bit of background if it might help....
-------(You can skip this part if you don't want all the details)------

For 5 years my wife manages a division of "Company 1". This division of the company is a retail sales location (yea not quite e-commerce), providing custom made formal dresses. "The owners of "Company 1" decide to part ways and sell off assets of the business. (legally they cannot sell the business itself)

We had planned on possibly buying this division of business for sometime, but estimated such a date to be at least a year away. But here the opportunity was now, so we pulled together our life savings, and for a great deal, we purchased a large part of the inventory, rights to the client, ph#s, web addresses...

We created a new company, and go about setting up all the things needed... business license, new bank accounts, etc.. Which leads us to creating a merchant account. Being thrifty, we search for good rates. Soon we find Charge.com and apply and are soon approved. (is anyone turned down I wonder?).

------(Pick up here if you skipped ahead)------
We receive the agreement papers with Charge.com. Much of it is already filled out with the information from the application. Such as "Expected Monthly Card Sales($): 35000" "Average Ticket($): 1000". Another box is already filled in with default information "High Ticket 0"

We fill out all the other needed info, federal tax id, SS#'s, bank account, etc... send it off and soon receive the email with our account information, and we start processing cards.

Soon we find that Amex/Discover transactions are not available. We call, get forwarded to voice mail boxes. Messages are not returned. More calls. Still no contact. Emails are sent. Finally a reply stating that those cards may take a week to be added. Fine. That's perfectly understandable, but a notice of some kind would be good.

Next we notice that funds are taking longer than the 2 days. At this point it had been 7 days. Strangely Amex cards are transfered through, but Visa/MC are not. More calls, even more numbers given to us with more mailboxes, many not even the same company. Several times I am told I will be called back in 20 minutes, and after 2 hours or so I call back and get voice mail.

Finally I gather from several sources that 1 day after the account was created, the funds were placed on hold, and that I will need to work with the "risk department". At no time did we receive any notification that the account had been placed on hold, or did they stop accepting our transactions.

By this point I am starting to get annoyed. Pitiful customer service, and I have now been involved with at least 6 companys. (Charge.com, Pipeline Data Inc, CTS Holdings, Secure Pay, Concord, NorthWest Merchant) But ok, fine. They are being careful. It should be simple to prove we are valid and not running some scam.

------(Pick up here if you skipped way ahead)------

They say they need to verify the first transaction, since it was "such a large amount". What is a large amount if they never asked us to indicate the "High Ticket". But fine. We will comply. So we fax over a copy of the invoice, and the customers signed contract. They throw out new requirements each time we send something in, saying the "underwriter is requiring..". Business license, bank account statement, profit/loss statements from "company 1", (btw, in 5 years and 2.5 mil worth of transactions "company 1" has had only 1 charge back for $128), even calling the customer, having them contacting the credit card issuer and making a note on the account that the charge was authorized. We have provided it all.

Currently they are wanting a copy of the lease, which we don't have yet, since we are rent free for the moment at "company 1's" original location, and cannot put the down payment on the new local without the 8+ grand they are holding. In response to this they argue that it is further example that we are a risk since we cannot get along without $8,000. - !!! - What? How many small business would not notice 8 grand missing?

Am I just nieve to see this all as dishonest, if not illegal? Is it all just a scam to suck interest off others earnings under the guise of potential risk?

Its now been over 1 month. I am at my end. I do not know what I need to say to them or the terminology to use that will end this endless trap they have us in. We counted on the existing cash flow from existing business as part of our startup capital. We cannot afford to hire a lawyer. We are running out of air, and Charge.com/Pipeline Data is holding us underwater because they are afraid we might drown.

I am hoping.. so hoping that someone, anyone, with insight from having the same type of experience, or from working at an honest merchant provider, can tell me what my options are, and how I can possibly get the funds that are rightfully ours and vital to our survival.

I am also looking for a new Merchant Account with an honest company. Any genuine recommendations for one that will not call a small business a risk automatically would be greatly appreciated.

Thanks for your time. Sorry for being so long winded.

Jay

Unfortunately, the situation you describe is not uncommon. Often processors and underwriting banks do not take the time to explain to new merchants how risk is calibrated and how processors deal with risk issues. Under the terms of most merchant processing agreements, the processor does have the right to hold funds to guard against losses incurred by excessive chargebacks or fraud. Usually for up to 180 days. The only way you will be able to get those funds settled will be to work with the processsor and meet their requirements.

Amex is settling because all your processor is doing is moving those transactions back and forth between you and Amex. They are not assuming any risk on them.

Welcome to forums BlueJ_05 !

I am really sorry about your situation and i am not really a merchant accounts pro, but from my point of view, i just cant understand what is the connection between your lease agreement and your funds beeing hold by charge.com, while you have provided all the required information concerning the order(s) ... Also you are operating in the office of Company 1, provided to you free of charge. I would recommend you to talk to someone from Company 1 and maybe they can make some kind of document stating, that you are renting the office ( some space) free of charge, since you are authorized reseller ( franchaser) of Company 1 ?

There should be the way to punish the companys ...

Hi Jay,

Sorry to hear about your situation with Charge.com/etc.

To address a few items in your post, it is not uncommon for a risk department at a merchant processor to briefly place a hold on a batch IF there is an unsually high transaction size on it which far exceeds the approved & stated limits.

The reason is that they are worried about a potential loss. If they release the funds on the sale and the merchant "takes the money and runs" and the product is not delivered or service not provided... then when the sale is ultimately charged back, the processor will take a loss for 100% of the amount.

Merchant processors, contrary to what many folks believe, do not - and can not - "earn interest" on held funds or anything along those lines. In fact, a merchant processor is never actually in possession of these funds as they are actually held in a security reserve account at the acquiring bank who sponsors the ISO/MSP.

When you hear mention of the "180 day timeframe" that is because as a rule of thumb, 6 months is the maximum liability window for a chargeback to be settled on most sales. Thus, after 6 months, a processor's risk for such a transaction is essentially mitigated and they can safely release any held funds.

All this being said... the bottom line here is that based on your post, you have done everything that has been requested of you by their risk department. There is no reason in the world why the issue should take any longer than a few days or a week to resolve if:
a) Cardholder has notated that they authorized the sale to their issuing bank
b) Proof of invoice and delivery has been provided validating sale was fulfilled
c) Bank statements showing financial status of company to support ticket size

There are lawyers that could write a letter to try to accelerate the situation at a fairly minimal cost but I think the #1 thing to do first would be to ask to speak to the head of risk management at the processor that you are working with and explain the situation directly to them to see if they can accelerate everything and point out to them how you have done the heavy lifting already.

They can see that you are a legitimate business, that you delivered as promised and the cardholder agrees so the risk is minimal. And perhaps, even offer that if they want to hold onto a portion of the funds in reserve and just release the rest of it - that would also be fine as a stop-gap measure just to get your cashflow back into sync.

I hope that they are willing to be reasonable and resolve this quickly for you!

I actually asked you abou this on the other forum. You mentioned three companies in the other forum but never asnwered any of my questions - it seems they are three different companies. Which one is actually holding the money?

This is awful BlueJ and I am sorry to hear it is happening. From what I just read, Charge.com, while not being exactly customer friendly, is within their rights. I'm sure that their contract said they can hold funds for 180 days because that is how long Visa/MaterCard give cardholders to issue chargebacks.
The lease issue is one of prooving who you are and that you are legitimate. It would have been nice had they asked for all of the information upfront.
I would recommend having a lawyer write a letter, or at least let charge.com know that this will be your next step. While they may be within their rights, noone wants to get into a lawsuit.
Make sure these things have been done:
-Your customer has confirmed for the company that they received the product.
-get them a lease, just have the original company write up a standard agreement with a $1 monthly rent. In lieu of that, tell the company you'd be happy to have them send out a site inspection company, or local sales rep (if they have any) that can look at your building.
-Make sure you have sent in all the requirements they have asked for.
-Tell them that you just want to settle this issue and you'll be fine with them shutting down your account if they perceive you to be of too high a risk.

Then, get a new provider. I can help you out with this, but I am not allowed to advertise on here. Contact me and I will explain as much as I can to you, my email is my username. Whether or not you are interested in setting up wit hmy company, doesn't matter, you obviously need someone honest to talk to and I'd be happy to take some time to explain things to you.

GOOD LUCK!

They are currently holding over 50k in funds from my business. I have given them everything they ask for then they ask for more. They promise a payout date then require more paperwork just to keep your money longer. They have had my money for over 1 month. STAY AWAY FROM THEM ! FAR FAR AWAY!!!!!! My business may have to shut down because of them.

I think that Pipeline/Charge.com has to be brought to justice. I filed a lawsuit against Pipeline in Fairfax VA and am interested to hear from anybody who was victimized by the Pipeline group so that the jury would know their predatory practice. My e-mail address is ak@PublicityGuaranteed.com

Best,
Alex Konanykhin

P.S. Here's what we are suing them for:

COMPLAINT AND JURY DEMAND

Plaintiff Publicity Guaranteed, Inc., by and through its attorneys, J.P. Szymkowicz, and the Law Firm of SZYMKOWICZ & SZYMKOWICZ, LLP, brings this Complaint against Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. seeking the entry of an order requiring Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc., jointly and severally, to pay Plaintiff Publicity Guaranteed, Inc. $1,915.00 in compensatory damages, $350,000.00 in punitive damages and court costs, and in support thereof states as follows:
Parties
1. Plaintiff Publicity Guaranteed, Inc. is a Delaware corporation that is licensed to conduct business in the Commonwealth of Virginia and regularly conducts its business operations through its office in Fairfax County, Virginia.
2. Defendant Pipeline Data, Inc. is believed to be a Delaware corporation that is operates out of a headquarters office in the Commonwealth of Massachusetts.
3. Defendant Pipeline Data, Inc. is believed to not be licensed to conduct business in the Commonwealth of Virginia.
4. Defendant Pipeline Data Processing, Inc. is believed to be a wholly owned subsidiary of Defendant Pipeline Data, Inc., and is believed to be a Delaware corporation that is operates out of a headquarters office in the State of Georgia that is not licensed to conduct business in the Commonwealth of Virginia.
5. Defendant Pipeline Data Processing, Inc. is believed to not be licensed to conduct business in the Commonwealth of Virginia.
Jurisdiction
6. This Honorable Court has jurisdiction over the claims presented in the instant Complaint pursuant to Section 8.01-328.1 of the Virginia Code since this matter concerns a contract entered into in Fairfax County, Virginia.
Venue
7. Venue is proper in this Honorable Court pursuant to Section 8.01-262 of the Virginia Code since this matter concerns a contract entered into in Fairfax County, Virginia.
Count I – Breach of Contract
5. The allegations contained in Paragraphs 1-4 of the instant Complaint are incorporated herein as if fully stated.
6. On or about August 2, 2005, Plaintiff Publicity Guaranteed, Inc. entered into a contract with Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. whereby Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. would process credit card transactions instituted by Plaintiff Publicity Guaranteed, Inc.’s customers in order to pay for services that Plaintiff Publicity Guaranteed, Inc. rendered to these customers.
7. In exchange for providing this credit card processing service, Plaintiff Publicity Guaranteed, Inc. agreed to pay Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. a fee that represented a certain percentage of the monetary value of each transaction.
8. The contract between Plaintiff Publicity Guaranteed, Inc. and Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. provided that upon completion of the credit card transaction, Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. would retain their fee and remit the remainder to Plaintiff Publicity Guaranteed, Inc.
8. On August 10, 2005 and on August 18, 2005, Plaintiff Publicity Guaranteed, Inc. charged a third party’s credit card a total of $915.00 via Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc.’s credit card processing system.
9. On August 18, 2005, Plaintiff Publicity Guaranteed, Inc. charged a third party $1,000.00 via Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc.’s credit card processing system.
10. Upon information and belief, the third parties whose credit cards were charged by Plaintiff Publicity Guaranteed, Inc. on August 10, 2005 and August 18, 2005 received charges on their credit card bills that showed such Plaintiff Publicity Guaranteed, Inc. as the “merchant.”
11. Despite these third parties being charged by their own credit card issuers, via Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. failed to remit payment to Plaintiff Publicity Guaranteed, Inc. as specified in the parties’ contract, thus breaching this contract.
12. The total amount that Plaintiff Publicity Guaranteed, Inc. is owed by Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. due to the breach of the contract is $1,915.00, plus interest, court costs, attorney’s fees and other charges.
WHEREFORE, Plaintiff Publicity Guaranteed, Inc. demands judgment against Defendant Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc.and respectfully requests that this Honorable Court enter an Order requiring Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc., jointly and severally, to pay Plaintiff Publicity Guaranteed, Inc. $1,915.00 in compensatory damages and court costs.
Count II – Conversion
10. The allegations contained in all preceding Paragraphs of the instant Complaint are incorporated herein as if fully stated.
11. By failing to remit the funds related to the August 10, 2005 and August 18, 2005 credit card charges in the total amount of $1,915.00 that Plaintiff Publicity Guaranteed, Inc. charged to its third party clients, Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. took a distinct act of dominion that was wrongfully exerted over Plaintiff Publicity Guaranteed, Inc.’s property, specifically the $1,915.00 previously mentioned, in denial of or inconsistent with Plaintiff Publicity Guaranteed, Inc.’s rights to that property.
12. Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc.’s conversion of Plaintiff Publicity Guaranteed, Inc.’s property, namely the funds related to the August 10, 2005 and August 18, 2005 credit card charges was done intentionally and with malice, thus, it is appropriate to enter an award of punitive damages against Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc. in the amount of $350,000.00 pursuant to Section 8.01-38.1 of the Virginia Code.
WHEREFORE, Plaintiff Publicity Guaranteed, Inc. demands judgment against Defendant Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc.and respectfully requests that this Honorable Court enter an Order requiring Defendant Pipeline Data, Inc. and Defendant Pipeline Data Processing, Inc., jointly and severally, to pay Plaintiff Publicity Guaranteed, Inc. $1,915.00 in compensatory damages, $350,000.00 in punitive damages and court costs.