While many merchant account brokers are trustworthy and fair, the term is still often associated with crooked companies.

Complaints about unscrupulous sales organizations have dropped dramatically in the last 10 years but business owners still need to beware. Fees, rates and requirements for accepting credit cards can be  complex, it's easy for uneducated merchants to be misled by fly-by-night operators.

Three common tricks: Hiding fees from merchants, disappearing after taking a large number of application fees, and changing the rate after 60 or 90 days because "volume requirements" haven't been met.

Between the Lines

Every industry has the low-ball con artist. Illegitimate merchant account brokers will sometimes lure you in with promises of low discount rates and little or no transaction fees and then hit you with exorbitant surcharges and monthly maintenance fees which are buried in the fine print of the contract.

Here's the facts: For businesses where the customer is present and the card is swiped, Visa and Mastercard charge an interchange rate of 1.47 percent plus a 9 cent transaction fee and a 10 cent discount per item. If you're a grocery store, gas station or doctor's office, the type of business where you see your customer face to face, these interchange rates apply to you. If you're approached by a salesman offering 10 cent transaction fees, or an introductory rates of 1.39% or lower, read the fine print. The credit card processor is not going to lose money to handle your credit card business. Commonly, if you're offered a rate below par, the broker or bank will add additional costs somewhere else, like "inquiry fees" or "network access" charges of 10 cents, 20 cents or more per transaction. Likewise, unrealistically low discount rates could be offset by a high monthly minimum. 

Internet merchants and mail order or telephone order businesses have a different interchange rate. Visa and MasterCard's standard rate charged to Internet merchants and MOTO businesses is 1.99 to 2.08 percent of the sale plus a 10 cent transaction fee and a 10 to 25 cent discount per item. Credit card processing companies must pay this amount to the card associations for each transaction. You should be skeptical if you're offered discount rates under 2 percent or transaction fees under 20 cents for your e-commerce or mail order transactions.

Loosely worded contracts can disguise clauses that give an ISO the right to raise discounts fees without notice or to impose new fees. A common tactic: Once the lease for your new equipment is finalized, your discount rate jumps to 1.8% or more. Look for a company that locks rates in place for at least 2 years. Confusing wording can also allow the ISO to extend the length of the contract at will, indefinitely locking the merchant into a money-losing situation.

If the ISO is unwilling to give clear answers to questions about rates or clauses in the contract or about business practices, that's a red flag.

"The reason some ISOs can get away with price gouging is that there is no usury law when it comes to discount fees," Millington said. "It benefits merchants to learn as much as they can about rates before signing a contract."

Scanning the Scammers

It's critical to investigate an ISO before signing up. The Internet has unwittingly made it easy for con artists to set up false ISO sites, collect payment from the merchant then fail to deliver any card acceptance services. According to card industry experts, such companies market themselves exclusively via the Internet and try to lure merchants with the promise of huge increases in credit card sales volume.

So how do you spot scams?

Scrutinize the Web site. Dicey ISO sites provide no information about the acquiring bank. They offer little, if any, information about the company sponsoring the site. Once the crooks have swindled enough businesses to attract the attention of law enforcement agencies, they close the site and reemerge on the Web under another name.

Stop by the office. It's easy for a shady ISO to post a business mailing address on a Web site; a full office front is a bit more expensive. So, if possible, visit the business address. If it turns out to be a mail drop -- typically, a mailbox service location instead of a business office -- you'll know to turn and run. This is one argument for doing business locally, even in this age of cybercommerce: You can be your own private eye.

Keep calling. Phone calls picked up repeatedly and exclusively by a recorded message point to problems.

Get educated. The ETA offers regional meetings, as well as training and certification programs, tailored for online merchants. The meetings and programs cover topics such as general strategies for guarding against bad ISO practices, ways to recognize usury pricing and merchants' rights. Tools like this increase your knowledge, and therefore your power, to protect your business.

Unscrupulous merchant account providers count on your confusion and lack of education about the online credit card industry. Don't be duped. Get smart.