First American Payment Systems, LP

The FTC alleged that First American promised merchants low or zero monthly fees while its written agreement carried a three year term and a $495 cancellation fee, and that it kept debiting accounts after consent was withdrawn. It returned $4.9 million.

Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.

Zero monthly fees, and a three year contract

First American Payment Systems, a Texas company, sold card and check processing to small and medium businesses through its affiliates Eliot Management Group and Think Point Financial.

Salespeople pitched small monthly fees, sometimes as low as zero, and promised large annual savings. The FTC alleges those claims were often false, and that the savings figures ignored that the company periodically raises prices for existing customers.

Salespeople also regularly told businesses they could cancel at any time, or within a trial period, without a fee. The company’s standard written agreement committed them to a three year term with a $495 cancellation fee.

Who this was sold to, and in which language

Many of the merchants had limited English proficiency. The sales conversation was conducted in their own language. The paperwork was only available in English.

The online enrollment system hid the three year obligation, the cancellation requirements and fees, and the automatic renewal, in densely packed documents that required clicking separate links to reach.

Zombie charges

The complaint alleges the company kept withdrawing money from merchants’ bank accounts after consent had been withdrawn. When a business asked its bank to stop payments, First American would attempt further withdrawals under different business names to get around the stop payment order.

The order

The defendants turned over $4.9 million for refunds. They are barred from misleading merchants about contract terms, from unauthorized withdrawals or withdrawals after a customer refuses payment, and must provide a cancellation procedure businesses can find and use. For anyone who signed an electronic agreement before April 6, 2020, they may not collect early termination fees or say such fees are owed.

In February 2025 the FTC sent more than $2.6 million to 5,588 businesses, and mailed claim forms to a further 16,181 businesses that enrolled between June 2017 and April 2020 and later cancelled.

What is not established

A stipulated final order resolves the allegations without any admission or finding of wrongdoing.

Sources

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