Medium riskBusiness

Merchant Services Scam

In this scam, a merchant services or card-reader provider promises big savings, then locks businesses into long contracts and leases with hidden fees, early-termination penalties, and equipment that is overpriced or unnecessary.

Quick verdict

Risk level
Medium risk
Scam type
High-pressure sales / hidden fees (payments)
Main red flag
A card-payment provider promising big savings with a long lease and hidden fees.
What to do first
Read the full contract and compare reputable providers before signing.

Understanding this scam

In this scam, a merchant services or card-reader provider promises big savings, then locks businesses into long contracts and leases with hidden fees, early-termination penalties, and equipment that is overpriced or unnecessary.

Small-business and workplace scams target companies with fake invoices, supplier and CEO impersonation, payroll diversion, bogus directory or registration fees, and purchase-order fraud. Business email compromise is among the costliest of all frauds.

If you take one thing from this guide, make it this: A card-payment provider promising big savings with a long lease and hidden fees. Read the full contract and compare reputable providers before signing.

If your message looks slightly different, check the Mortgage Broker Scam or the SEO Services Scam, both are close cousins of this pattern. Every related guide lives in the Small Business & Workplace Scams guides, and the scam checker can scan the text you received.

A typical example

Example pattern, not a real report
Example pattern: 'Switch your card payments to us and save big!' followed by a long, hard-to-exit lease with hidden fees.

This is a fictional, anonymised example used to illustrate the pattern. It is not a verified real message, and any names are used only to show how the scam typically reads.

The tell here: A card-payment provider promising big savings with a long lease and hidden fees.

What the data shows

$2.9B
reported lost to business email compromise (BEC) in the US in 2023
Source: FBI Internet Crime Complaint Center
$12.5B
total reported internet-crime losses in the US in 2023
Source: FBI Internet Crime Complaint Center

Warning signs

  • Promises of big savings with little detail
  • Long contracts and equipment leases
  • Hidden fees and early-termination penalties
  • Pressure to sign quickly
  • A provider you cannot verify

Your safest response

  • Read the full contract, fees, and exit terms before signing
  • Compare reputable, verifiable providers
  • Be wary of long leases and pressure to sign
  • Get advice before committing

If you have already engaged

  • If you signed, check cancellation rights and act within any cooling-off period
  • Dispute the contract if you were misled
  • Keep all paperwork as evidence
  • Report misleading sales to authorities

What to avoid

  • Do not sign without reading fees and exit terms
  • Do not trust vague big-savings promises
  • Do not lease equipment under pressure

You might also see

High risk Bank & Payment

Mortgage Broker Scam

In this scam, a fake mortgage broker or lender promises guaranteed approval or unusually low rates regardless of your credit, then charges upfront 'arrangement', 'insurance', or 'lock-in' fees for a loan that never materialises.

Created by Scam or Safe Editorial Team
Medium risk Business

SEO Services Scam

In this scam, cold callers or emails offer guaranteed top Google rankings, claim to be 'from Google', or threaten that your listing will be removed, charging for SEO services that are useless or harmful.

Created by Scam or Safe Editorial Team
Medium risk Business

Directory Listing Scam

In this scam, businesses receive official-looking invoices or 'renewal' notices for online or print directory listings they never ordered, hoping a busy team pays without checking.

Created by Scam or Safe Editorial Team

Questions people ask

How do I choose merchant services safely?
Read the full contract, fees, and exit terms, compare reputable providers, and avoid long equipment leases or pressure to sign quickly.
Why are leases a warning sign?
Long, hard-to-exit leases with hidden fees and penalties can cost far more than the promised savings. Understand the total cost before signing.
I signed and now face hidden fees. What now?
Check cancellation rights and any cooling-off period, dispute the contract if misled, keep paperwork, and report the provider.
How do I compare providers?
Look at total costs, contract length, exit terms, and reviews, and get independent advice before committing.

Last reviewed June 2026 · Written & reviewed by the

Disclaimer: This page provides educational information only to help you recognise common scam patterns. It is not legal, financial, cybersecurity, or law enforcement advice, and it does not confirm whether any specific message, company, or person is genuine or fraudulent. When in doubt, contact the official organisation directly and report concerns to your local authorities.