On October 15, Minnesota’s attorney general sued a Texas credit card processor, accusing the Apex Merchant Group (“Apex”) of using bait and switch tactics to rip off small businesses.  Apex allegedly promised small businesses it could save them money on credit card processing services, then hit them with higher undisclosed fees.

According to Minnesota Attorney General Lori Swanson, Apex fraudulently altered the terms of signed contracts by later inserting new pages into the contract that contained higher rates and/or cancellation fees not agreed to by the small business, locking them into long-term contracts.  In some cases, Apex allegedly altered the “transaction fee” – or the fee the business pays each time a customer uses a credit card – to increase it by as much as double.  The complaint further states that Apex took almost two years to reimburse the cancellation fee of one Minnesota business.  In other cases Apex refused to reimburse the cancellation fees entirely.

Swanson is charging Apex with violating Minnesota’s Prevention of Consumer Fraud Act and Uniform Deceptive Trade Practices Act.  The suit seeks to stop to Apex’s activities, impose civil penalties, and gain restitution for an undisclosed number of businesses.

“Small businesses employ over half of our employees and often operate on thin margins.  They cannot afford to be ripped off by credit card servicers,” said Attorney General Swanson.