Protecting your business from a bad contract

For Fraud Prevention Month, My StartUp is giving you expert advice and insight from the front lines of fraud prevention, with a series of blogs written by CFIB Business Counsellors who are all-too-familiar with the types of fraud that affect small businesses. They hear about the scams from concerned businesses virtually every day.

Today’s blog covers unfair contracts and some of the high-pressure sales tactics that lead to them.

You shouldn’t have to be a Harvard Law School grad to make sense of a contract related to processing payments at your small business. Yet some of these contracts can leave you vulnerable to unexpected charges on what you thought was a great deal.

Don’t get stuck paying more than you should to take payments at your business.

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MP900431293_JPGOne of the most common calls that I receive from CFIB member businesses is about credit processing contracts and their sales techniques. Sales agents often use high-pressure sales techniques and provide misleading information just to get you to sign the contract.

Be on the lookout for some of the questionable techniques sales agents will use:

  • Saying their company is recommended by CFIB (even though it is not).
  • Saying you are being offered a lower rate, until you are locked into the contract and then you realize you are involved with multiple companies and the rate only applied to one.
  • Claiming that your business can cancel at any time for no added cost, but when you try to cancel, there are added fees and complications.
  • Asking you to send your current processing statements so they can ensure you get the best deal.

Unfortunately, many of these deals are simply too good to be true. The sales agents will say almost anything in order to get you to sign the contract. Usually the phone number the sales agent leaves behind ends up not being in service by the time you really need the help or when you try to verify the terms of the offer made to your company.

Consider five tips to avoid these types of scams:

  1. Call CFIB: we can verify a lot of the information and help you get all the facts.
  2. Never give out your company’s statements. These are private documents with a lot of sensitive information.
  3. Always read your contract line by line to the end, and make sure you read the fine print.
  4. Get a lawyer to review the contract. While you may think it costs too much money to consult a lawyer, remember that if you sign a bad contract, it could lead to even more time and money spent fighting to resolve the situation.
  5. Watch this handy video on things to consider when you’re choosing a payment processor.

CFIB has a wealth of information on how to protect your business from getting locked into a bad contact.

When in doubt, always remember that CFIB’s Business Counsellors are here to help you should you have any questions regarding card processors, or fraud_logo_colorany other fraud-related issues.

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Elaine1Elaine Lockwood has been a Business Resource Counsellor with the CFIB since July 2015. Elaine graduated from the University of Regina with a business degree, majoring in Human Resources. Elaine notes that the best part about her job at CFIB is helping the organization’s dedicated members each and every day.

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