When applying for a merchant account it is important to do your homework so you don’t get suckered into a merchant account scam. These merchant account scams have become very popular since the world of ecommerce exploded several years ago. Now, people are trying to take advantage of fledging companies just breaking into online business.

How do merchant account scams work? Basically through their advertisements they will make you believe that their monthly fees will be fairly low and reasonable, but will fail to mention all of the hidden fees you will experience and the numerous start up costs that they also conveniently forget to mention. Many budding online companies are charged such high start up fees in their first few months of business that they are unable to use their resources for things like advertising.

Here are some examples of the hidden fees you may experience when caught up in a merchant account scam. You will be charged with charge back fees, retrieval fees, termination fees, gateway fees, hidden set up charges, minimum fees, over limit fees, and batch fees. These are just the tip of the ice burg. Merchant account scams will try to justify charging you all of these fees and more. It is very important before signing any contracts that you read the fine print and also call their 800 number and ask if there are any other fees that are not mentioned on the website.

Merchant account scams will also sucker the unsuspecting business owner with misleading ads. For example, they may claim to have no set up fee, but it will turn out that they will have a software fee, gateway fee, and terminal fee all of which you will need to pay before you can accept online payments.

The most important thing you can do to avoid costly merchant account scams is to read the fine print and don’t be afraid to ask questions.