Submitting a chargeback against your own card processor

[Tonearm]

I was recently charged a $500 fee by my merchant account provider. Long story short, the fee is not reasonable and they refuse to credit it back. I'd like to submit a chargeback against that fee with my bank, but I wonder what would happen after that. It's a weird situation. What do you guys think?

[LifeinAsia]

"reasonable" and "legal" are 2 different issues. Was the fee in line with the processor's ToS that you agreed to? If it was clearly outside the ToS, you could talk to your bank and report it as an unauthorized transaction. But unless you are clearly right (and not just think you are), you could probably end up in hot water if it turns out that you are in the wrong. If the police get involved, I believe you could be charged with filing a false police report.

A better option may be small claims court to recoup the fee. At least that way if you are ruled against, you won't be in legal hot water.

No matter what, it sounds like you should be looking for a different merchant account provider. Taking action against them will probably cause them to drop you immediately.

[Tonearm]

I called them a week ago to be sure I wouldn't be charged this fee and they told me I would not. Not only that, I have a recording of the call, told them so, and they told me it didn't matter!

Sounds like I should get set up with another provider, switch everything over to them, cancel the old account, and submit the chargeback.