How to spot and report slamming scams

posted in: Scams | 6

What is a merchant account slamming scam?

Person lying over the phone
© Depositphotos – Federico Caputo

The term “slamming” refers to a deceptive sales practice intended to switch a customer’s service provider without his or her knowledge or consent. This ripoff tactic first popped up in the telecommunications industry in the 1980s, when unethical telecom providers would notify AT&T of a customer’s intention to cancel service and switch carriers without the customer’s permission. This would result in the unethical provider gaining a new customer, but it would also leave that customer dealing with unexpected fees and multiple bills for a single service.

Slamming has since spilled over into the credit card processing industry, but in a different form. Instead of filing a fake cancellation in the name of the merchant, unscrupulous merchant account providers can scam unsuspecting merchants by posing as their current provider and reprogramming their terminals.

How merchant account slamming works

In a credit card processing slamming scam, an unethical agent calls up a merchant and pretends to be that merchant’s current provider. Since it can be difficult to obtain the name of the merchant’s actual provider or sales rep, the agent will usually claim to be a representative from “merchant services,” “the processing company,” “the bank,” “Visa/MasterCard,” or some other vague entity.

The agent will then inform the merchant that his or her processing equipment is out of date, noncompliant with PCI standards, or incompatible with a new feature that the company is providing. The agent offers to send someone out to “reprogram” or “update” the merchant’s terminal for free, but this is actually an excuse for the salesperson to come out and program the merchant’s terminal to process through the agent’s own company.

By allowing his or her terminal to be reprogrammed, the merchant will start paying processing fees to the unethical agent’s company. But the merchant will also still owe the monthly fees under his or her former processing agreement, resulting in double billing. To make matters worse, the merchant may even be in breach of that original contract. This is because most merchant services agreements include clauses stating that the merchant must not process payments through any other company, often under penalty of harsh termination fees. The merchant may not receive an opportunity to explain the mistake, or worse, the merchant’s original provider may not even care to listen to an explanation.

What can be done to prevent slamming scams?

Avoiding a slamming scam might seem like a matter of simple common sense to some people, but it’s best to keep certain precautionary measures in mind to avoid falling victim to this tactic.

Verify the caller’s identity – If a sales rep identifies himself or herself as being with “Visa,” “MasterCard,” “merchant services,” “the bank,” “the processor,” or anything else besides your specific account manager calling from your specific merchant account provider, you should be suspicious. Visa and MasterCard do not directly service merchant accounts.

Don’t let jargon confuse you – If a phone representative is trying to convince you that your processing equipment isn’t compliant with PCI standards, the EMV switch, the Durbin law, or “the new regulations,” don’t be fooled. The same rule applies to any claims about how you could be qualifying for lower rates. Hang up and contact your provider on your own to ask them about any changes you should know about.

Don’t consent to a change of service over the phone – If the caller offers to schedule a visit to reprogram your terminal, or if they offer to fax you some paperwork to get a new terminal shipped to you, don’t fall for it. Slammers are notorious for sending over incomplete paperwork that obscures their identity while still legally binding you into a new processing agreement.

Report the numbers and stated identities of the callers to your state’s attorney general – Although the credit card processing industry tends to receive very little regulation as a whole, there has been a recent crackdown on companies who misrepresent themselves both over the phone and in their documentation. A pair of lawsuits filed against Merchant Services Direct, LLC (now known as Sphyra) and Northern Leasing Systems indicate that regulators are starting to wise up to deceptive tactics within the industry, meaning that they may want to hear from you about any suspicious phone calls you receive.

Do you have any experience with slamming scams? Let us know in the comment section below:

6 Responses

  1. Scam-Baiter

    Like others, I own a couple of businesses that get these calls over the years.
    The newest ones are;
    * Google Business listing scam calls
    * Climate Change Defense Fund ( stopped after the U.S. pulled out of the Paris Climate Accord )
    * Credit Card Processing

    These made me so upset that I thought I’d snap…….and I did…..I began baiting them.
    If I had the time, I’d make them give me their details multiple of times to where they were getting sick of trying to get me to “understand” different things.
    I would ask outlandish questions and pressed for answers as they believed they had me hooked.
    My business had a Carbon-Tax Refund with the IRS because we only used renewable Fossil fuels and Solar cell phones……my carbon filtered socks also reduced my carbon footprint, plus I drive everywhere to reduce my carbon footprints and only put out rubber tiretracks…………gotta save them bi-polar bears!
    After screwing with them for just a little while, they THEMSELVES would remove my numbers from their calling lists because for the hassles they were getting.
    Look up Hoax-Hotel & Poppa Monkey on YouTube to see this in action.


    I received a voice message from Merchant Services 615-422-8407 and was told to call back by 4 p.m. that day with a case # they provided. I called back at my convenience…….
    6 days later. The representative went into a spiel
    about an acct. I asked which acct. which acct. #, to which she replied that she was trying to tell me & returned to her rehearsed script. I said get to the or I will hang up. She wouldn’t & I did.

  3. Lisa the Bookkeeper

    I get a call about once per month from someone trying to be from my provider of “Merchant Services”. Today was no different as Amanda from Merchant Services (caller id said 214-227-7725) called to try to tell me about being overcharged fees by VISA, Mastercard, etc. I was able to get rid of her because I know who my provider is, and she wasn’t from there.

  4. Gilbert Raynor

    I received a call from some saying they were from Merchant services. I had my office manager obtain a name and phone number for a call back, suspecting spam. Only a first name was given, they said they were not from my Bank butr worked above my bank. Whatever that term was supposed to mean. the number given was 972-646-8271 and there are multiple notices if you google the phone number. A return call yielded only a voice messaging system where they were instructed not to call again


    I own an appliance repair service company. On a daily basis I receive numerous calls from businesses who imply that they can get my google listing in the number one position. I am supposed to be on a do not call list. These callers are very forceful is there any way to find who their merchant account is with. Or, is there another method to get their account cancelled?

  6. Jacqueline Meyers

    I have been contacted about this seemingly great opportunity to become an agent. But they want to charge my credit card for ISO certification. I have been searching online and can’t find anything to verify that this is legitiment. I have checked which doesnt help. It looks generic and doest have the usual accredations attached. They say that is a generic site of what mine would look like. So I tried looking up Advantage Merchant Solutions and still, it doesn’t solidify legitimacy. This guy sounds for real and gives me sites to look up, they all say business like this exist but none actually tell me that this company is for real. I asked about BBB and he says they dont pay to be accredited because it is counter productive for their company because people are always mad at credit companies and will give bad reviews, as well as some bad companies that are in good standing with BBB. He says they cant be found on the internet because they are an internal company. Is this a scam to get my money and credit card information? It has to be right? Please help stop these people, and in doing so, it will help me feel I am making the right desicion by turning down this seemingly great opportunity.
    Thank you,
    Jackie Meyers

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