Credit card processer, state reach settlement over unauthorized billing
Staff Report | January 07,2013
MONTPELIER - Merchant Service Center, an Ohio-based credit card processor, has agreed to settle with the state in connection with unauthorized charges to customers for services they didn't order - also known as negative option marketing.
According to the settlement announced Monday by the Attorney General's office, Merchant Service Center offered a package of services to its existing customers, including web hosting, email accounts, accounting software, data storage, and a pharmacy discount card.
The last paragraph of the company's offer letter stated that if customers did not contact Merchant Service Center and cancel the service in 30 days, they would be charged $19.95 a month.
Negative option marketing means that a business announces a service and goes ahead and charges the customer, unless the customer says they don't want the service.
Attorney General William Sorrell said the problem with programs like this is that some customers may not read the offer letter, and may not realize that they are being charged for a service that they have no use for.
Merchant Service Center agreed to reimburse its Vermont customers, revise its procedures regarding negative option offers, and pay the state $1,000 per letter sent, for a total of $7,000.