I am the President of a small business located in Mississauga, ON Canada. In July of 2007 I was contacted by Michael Ryan of Cardex offering lower rates on our merchant account. Michael stated in his email "these are not introductory rates". Michael provided a rate of 1.75% for Visa and Mastercard processing. No "NQ" fees applicable. I read the contract in detail over a period of six weeks. Michael would continue to call during this time period, he was quite persuasive. Cardex wanted a five year term but settled for a one year term at my insistance.
I signed the contract early September 2007 and in October 2007 we began processing through our purchased terminal.
On our November 2007 monthly statement I noticed $700 had been deducted for "NQ" fees. I called Cardex and the charge was corrected - the funds were
credited to our bank 3 months later.
In early May 2008 I noticed Cardex had pulled from our bank an extremely high amount for April's monthly merchant fees. I immediately called Cardex - as I hadn't yet received my April statement, I asked that it be faxed to me. After seeing that I was once again charged "NQ" fees I called Cardex and was directed to Colin the "retention specialist". Colin explained that due to Visa Canada's new fees, all merchants would now be paying in the 3.4% to 4.2% range. I accepted his explanation.
Over the next few weeks I spoke with other merchants in the same industry as we are. Since our company sells supplies to retail stores, I had the opportunity to also speak with at least 10 retail store owners per day. It became my mission to find out the experiences of other business owners. The results were suprising - a few merchants had seen a 0.25% to 0.45% increase, while I had seen an increase well over 2% which put us in the 4% range for processing over $1.5 million annually in Visa and Mastercard processing.
During my research, I called Visa Canada. I spoke with a supervisor who informed me that the small increase Visa implemented shouldn't have caused the rates charged by Cardex to increase to the degree that they had. Colin also stated that the rates were set by Global Payments and not Cardex. A call to Marlene Vanzil of Global Payments proved that I was being mislead again. Marlene said that Cardex sets the rates, not Global Payments as Colin had said.
I called Colin to discuss the results of my research. Colin stated that the person I spoke with at Visa Canada didn't know what they were saying - it was only the top executives at Visa Canada that would know of the increase.
When I asked Colin why 50 other merchants I had spoken with had not seen the vast fee increase, Colin stated that other merchant providers didn't yet have the updated technology to charge the extra fees.
Colin "tried to help" by emailing a new contract. The rates, as they were set out in the contract didn't quite look correct. I realized that my new contract Colin wanted me to sign - which would "save money" as he stated, had a rate of over 4%. If my original contract stated 1.75% and six months later resulted in 4.21%, I wondered what would have happened if I signed a contract stating over 4% in fees.
I called Colin again to discuss cancelling my contract. Colin said that I couldn't cancel the contract and that he could authorize to have funds withdrawn from our bank at any time and for any amount he wanted to.
Apparently Colin is the only person that can cancel our contract and he is not responding to my emails or telephone messages I have left for him.
I should also note that I spoke with Kasey Landau, the President of Cardex. He said that he would not speak with me about the issue and that my only option was to speak with Colin.
I sent a fax to Cardex late June informing that I would not be using their merchant services. A stop payment was also issued by my bank.
Sadly, I have recently been in contact with 6 other Canadian small business owners that have had a similar experience with Cardex.
I have made it my mission to warn as many other companies as possible about the deceptive practices of Cardex.