“Leaders Merchant Services” is Leading the Way With Hidden Fees!

Trickery of Leaders Merchant ServicesIn our ongoing series of exposing the trickery of merchant account companies, we decided to contact Leaders Merchant Services to take a look at what they offer. With a quick Google search, you’ll see that they advertise under the url www.rockbottommerchantaccounts.com. They want you to think that you’re getting “rock bottom” rates when, in fact, you’re getting a “bottom of the barrel” deal.

“Leaders Merchant Services” is one of the worst examples of trickery we’ve ever seen. 


We initially contacted them through their online form to request a quote. A representative responded with a prompt email requesting more information. After I indicated that I was looking for the ability to process credit cards for items sold through a website, he responded back with a simple listing of rates and fees (click the image of our email exchange to the right).

Here’s what they emailed us:

The total fees for our service are as follows:

Monthly Gateway Fee: $15.00
Monthly Customer Service & Statement Fee: $7.95
Batch Fee: $.35
AVS Fee: $.10
No Annual Fee
No Application Fee

Visa/MC Rate: 1.79%
Discover Rate: 1.99%
Amex Rate: 3.50%
Transaction Fee: $.22

Notice the term “total fees”. If I were a merchant looking for a credit card processing, I would assume that this is what I’d be paying for all my transactions. I would assume that all my transactions would have the rates noted for Visa, MasterCard, Discover, and American Express. (When we actually received the contract, we find out that they offer three-tier pricing – the worst possible merchant account for a small business.)

Leaders Merchant Services is simply tossing out the bait hoping that we’ll bite. 

When I noticed that he didn’t include PCI Compliance, I asked him if there was an additional fee. He immediately emailed back and apologized for not including it. Do you really think he forgot about a $69-$129 charge? Or, do you think he was instructed by his boss to leave that out because it might scare new customers away?


A few days later, we received a marketing email from Leaders Merchant Services offering a promotion for the month:

  • Monthly customer service fee is only $4.95 a month.
  • Swiped rates are 1.09% & .27 cents a transaction for larger transactions.
  • Swiped rates are 1.39% & .18 cents a transaction for smaller transactions.
  • Keyed/Internet rates are 1.79% & .22 cents a transaction.
  • Free Terminal!  There’s just a one time fee for shipping, handling & programming of $45

WOW – a promotion – sign me up! I noticed they’re now trying to lure me in with different rates than they offered during my first trickery experience, so I requested  the “paperwork” in order to take a look at the fine print. When the email with the contract arrived, it included the following text in the body:

  • No application fees
  • No set up fees
  • No annual fees
  • No monthly customer service fee
  • No security monthly fee

I was excited to see that they were offering me such a great deal, and I couldn’t wait to open of the attached file to take a look. When I opened the contract, I WAS SHOCKED BY WHAT I READ! Open the contract and walk through the trickery with me.

Six Critical Reasons to Avoid Leaders Merchant Services:

  1. They will give you three-tier pricing! (page 3)
    As I’ve mentioned previously, three-tier pricing is the worst option for small businesses. If you’re not familiar with what three-tier pricing is all about, click here for a quick lesson. Although they initially emailed us with a simple rate structure, now they’re finally telling the truth! On page three, you’ll notice the “+” sign next to Mid-Qual Rate and Non-Qual Rate.
    When a customer is using a rewards credit card or if the card is keyed into your cash register or computer instead of being swiped, plan to get charged the Mid-Qualified Rate – which is .60% + 1.79%. And, when your customers gives you a corporate credit card, when a customer’s address and zip code don’t match what’s on file, or when your sales aren’t sent through the terminal within 24 hours, you’ll be charged the Non-Qualified Rate – which is 3.99% + .60%. They failed to mention all of this in their initial “bait and switch” marketing to us.
  2. They are locking you into a 3-year contract with a $350 termination fee. (page 4)
    By signing this contract, we would have been locking ourselves into a three-year contract. Here’s what the fine print says:“If Merchant is approved, any cancellation by You of this Agreement within three (3) years from the date of approval or is terminated by Servicers due to an Event of Default by Merchant, will be subject to the applicable early termination fees and Merchant will be charged a fee for such early termination equal to (i)$350.00 if terminated before the completion of the first year of the Term; or (ii) $250.00 if terminated after completion of the first year of the Term but prior to end of third year of the Term (see section 22.1 of the Agreement-Program Guide).”

    If we cancel in the first year, we’re charged a $350 termination fee. If we cancel after the first year, we would be charged $250. They failed to mention all of this in their marketing to us. Do you really want to be locked in for 3 years?

  3. They disguise their setup fee as a “Business Information Verification Fee.” (page 4)
    Remember how they said there was “no setup fee.” Take a look at page four, and you’ll see a $25 charge in the fine print.“A $25.00 Business Information Verification Fee will be assessed to Merchant within thirty (30) days of Merchant Account being approved.”

    Of course it’s not a setup fee, we just need to verify that you’re a legit business. Great disguise!

  4. They charge a $4.95 regulatory fee. (page 4)
    What is that all about? What’s getting regulating and who is that money going to? We can tell you one thing…you’re bank account is getting regulated at $4.95 a month. What are you getting in return?.
  5. They automatically enroll you in “Premier Customer Care” for $12.95 per month. (page 6)
    Remember how they said “no monthly customer service fee” in the email that came along with the contract. BOGUS! Look at what’s in the fine print:”LEADERS automatically enrolls all of its merchants in its Premium Customer Care (PCC) program. This program provides merchants with: (1) a lifetime warranty under the same terms as the manufacturer’s warranty on our leased or purchased equipment, (2) LEADERS’ in-house Technical Support from 6:30 am – 6:00 pm PST, Monday through Friday, (3) free terminal supplies (including shipping), (4) discounts on peripheral equipment and, (5) free loaner equipment for up to 30 days during warranty repairs on leased or purchased equipment. Call 1-877-538-3377 and ask for the Installation and Training Department for all your PCC needs. The cost of the PCC program is only $12.95 per month (debited at the beginning of each month) and it WILL save you money!”They hide their Premier Customer Care (PCC) in the fine print and assume you won’t read it. In order to opt-out of this service, you have to check the box on the lower-right corner that says “PCC NO.” Seriously? Do you really want to work with a program that hides a fee for customer service in the fine print?.
  6. They only offer a $100 one-time bonus for a referral. (page 7)
    Although $100 is a nice pat on the back, I’m not really sure that it’s going to help your business on a monthly basis. You need a referral program like no other 

In all our research, we’ve never found a worse case of trickery than in the case of Leaders Merchant Services. Their initial email provided minimal information, and they portrayed themselves as a “full disclosure” company. In reality, they hide their outrageous three-tier pricing and disguise their fees in the fine print. You must know that there is a better option.