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Unfair Trade Practices

Unfair trade practices are a significant issue in the realm of merchant processing litigation. Payment processors have been known to engage in a range of deceptive and harmful practices against small businesses that rely on their services to accept credit and debit card payments.

If you feel like your payment processor is taking advantage of your business, Sigal Law Group's skilled merchant processing litigators can help. Contact our offices today for a free consultation.

What Are Unfair Trade Practices?

Unfair trade practices refer to the use of deceptive, fraudulent, or unethical methods by businesses to gain a competitive advantage or cause harm to consumers. These practices can take many forms, including:

·        False advertising

·        Misrepresentation of products or services

·        Price discrimination

·        Anti-competitive behavior

Consumers and businesses can take legal action against unfair trade practices through various channels. The Federal Trade Commission (FTC) is the primary federal agency responsible for enforcing consumer protection laws and investigating allegations of unfair trade practices.

For example, in 2022, the Federal Trade Commission (FTC) took action against the First American Payment Systems after they reportedly made false claims about their fees and cost-saving efforts to lure merchants into signing up. After merchants signed on, First American Payment Systems started withdrawing from their accounts without their permission, which made it extremely difficult and expensive for merchants to cancel their service.

Some merchants may choose to avoid the FTC route and instead file a civil lawsuit against the payment processor for compensatory or punitive damages. To prove the payment processor is guilty of unfair trade practices, the consumer or business owner must be able to show that their actions were:

·        Deceptive,

·        Caused an injury or harm and

·        Violated an established public policy.

Essentially, you will have to prove that the payment processor's conduct was unfair and deceptive rather than proving they had the intent to harm or be unfair or deceptive.

When you win a civil lawsuit against a payment processor for unfair trade practices, you could receive anything from an injunction, fines, and compensation for the damages you suffered. To ensure you are successful in such a case, it is incredibly important to work with an experienced merchant processing litigation attorney. Sigal Law Group can help. Contact our offices today for a free consultation.