A Spokane Valley credit card processing company has settled a Federal Trade Commission complaint that alleged the company used deceptive sales practices to gain small business accounts.
Merchant Services Direct will pay $175,000 and agreed to make business changes including better training, implementation of an ethics code, hiring customer service representatives and firing sales agents with multiple complaints.
The FTC accused Merchant Services Direct, which also did business as Sphyra Inc., of tricking small businesses into signing contracts by telling the owners that the documents were mere applications to put together a price quote. The company also was accused of duping small businesses by saying their credit card swipe terminals were outdated and needed to be replaced.
Credit card processors handle a business’ sales transactions and equipment.
Merchant Services Direct fought the civil complaints during the past 15 months, insisting that it had not broken any laws as the civil complaints unfolded in state and federal courts.
In its news release regarding the settlement, the company noted that the FTC failed to obtain a restraining order from a federal judge.
“We are glad to put this behind us,” owner Shane Hurley said. “While there were customer issues that needed to be addressed, we always believed all of our practices were legal.”
Other defendants settling charges tied to the case include Hurley, Kyle Dove and Boost Commerce Inc.
The company has about 15,000 small business customers across the country.
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