Class Action Says Merchant Lynx Services Takes Unauthorized, Excessive Card Processing Fees from Small Businesses

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An Alabama fur cleaning, repair and storage company alleges Merchant Lynx Services has assessed and taken from small businesses nationwide “unauthorized and excessive fees” for the sole purpose of increasing its own profits. 

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The 46-page complaint alleges Merchant Lynx Services has for years abused its position as a middleman between merchants and credit card processors by promising small businesses upon sign-up a “simplified ‘flat rate’ fee” for card payment processing only to levy “a host of unauthorized, undisclosed, and unnegotiated fees” once a business is locked into a long-term contract. 

To hide its conduct, Merchant Lynx Services, the case claims, combines these impermissible fees with “legitimate costs” associated with card processing services, effectively disguising the improper charges from unsuspecting small businesses. 

The filing stresses that debit and credit card processing fees are typically complicated, as it can be difficult for a business to understand exactly how and how much they will be charged for processing services. As such, the suit says, merchants rely on payment processing providers to be transparent and up-front about the costs and fees associated with what’s generally the fourth-highest expense for many small businesses, after rent, labor and product costs. 

According to the suit, Merchant Lynx Services provides would-be clients with one document, a “short and simplified” merchant agreement that “plainly states the fees the merchant will be charged.” Once the contract is signed, the lawsuit alleges, the defendant “unilaterally increases the fees or adds new fees,” and then “seizes” the charged amounts from the business’s bank account, often before sending out a billing statement. 

When challenged on its practices, the case says, the company relies on its terms to “suggest it is authorized” to unilaterally assess additional, hidden fees, hike up fee rates and “ultimately conceal the actual costs of the card processing services” it provides. 

“In this way, merchants see and execute one document that clearly displays the agreed-on rates and fees, but are purportedly bound by another document that attempts to erase or undo all of those terms,” the lawsuit summarizes. “In other words, Merchant Lynx attempts to use the fine print Terms to surreptitiously alter the agreed-on fees and rates that were in fact reviewed and approved by the merchant.” 

Further, the case calls the provisions Merchant Lynx allegedly uses within these terms to shield itself from liability “illusory” and “unconscionable.” 

The lawsuit looks to cover all merchants in the United States who paid a fee or charge to Merchant Lynx Services that differs from those set in the company’s “Merchant Application and Agreement.” 

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