July 31, 2013 in City

Deceptive tactics alleged

Attorney general claims two Valley businessmen misled small businesses
By The Spokesman-Review
 
Failing grade

Merchant Sales Direct had an “F” rating with the Better Business Bureau after receiving 107 complaints in the past three years.

Two Spokane Valley businessmen with a history of consumer complaints about their credit card processing company now face charges of using deceptive sales practices to trick small businesses into buying their service.

Kyle L. Dove and Shane P. Hurley, who operated Merchant Services Direct LLC, which is now called Syphra Inc., trained sales representatives to deceive thousands of small-business owners, according to Washington Attorney General Bob Ferguson.

Since 2008, the salespeople misrepresented that they could offer lower credit card processing rates and better equipment, such as card-swipe terminals, that businesses use for sales transactions, according to complaints filed in court by the attorney general.

In some cases, the company’s sales agents induced small-business owners to sign new contracts for credit card processing under the guise that they were signing updated paperwork with the business’ current card processor, the attorney general’s office said.

In other cases, the company is accused of presenting bogus cost analyses.

The complaint, filed under the Consumer Protection Act, detailed several other alleged deceptive sales practices and services including undisclosed cancellation fees of up to $400. “Scamming small business owners in Washington will not be tolerated,” Ferguson said in a news release.

Merchant Sales Direct, also called MSD, had an “F” rating with the Better Business Bureau after receiving 107 complaints in the past three years.

Dove oversaw the sales and marketing departments and left the company several months ago, a spokesperson for the company said.

Hurley, who ran the payment processing service and customer service, declined to comment on the specific allegations. In a statement forwarded by his attorney, however, he said “our company is confident that it has always gone above and beyond to provide honest and valuable services to our customers, and intends to vigorously defend that position in court.”

The Federal Trade Commission also filed a complaint seeking to stop the two men from doing business in other states.

The accusations by the agencies are part of a civil action to freeze the business assets and stop further sales.


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