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Merchant Service Center To Pay $1,000 Per Letter For Negative Option Letters Sent To Vermont Businesses

CONTACT: Ryan G. Kriger, Assistant Attorney General, (802) 828-5479

January 7, 2013

Attorney General William H. Sorrell announced today that Merchant Service Center, an Ohio-based credit card processor, has agreed to settle with the State of Vermont today regarding negative option marketing that took place in late 2011. Negative option marketing means that a business announces a service and proceeds to charge customers for the service if the customers do not affirmatively decline it.

In this case, Merchant Service Center offered a package of services to its existing customers that included web hosting, email accounts, accounting software, data storage, and a pharmacy discount card. The last paragraph of the offer letter stated that if customers did not contact Merchant Service Center and cancel the service in 30 days, they would begin being charged $19.95 each month. The problem with programs like this is that some customers may not read the offer letter, and may not realize that they are being charged for a service that they have no use for.

Merchant Service Center agreed to reimburse its Vermont customers, revise its procedures regarding negative option offers, and pay the State $1,000 per letter sent, for a total of $7,000.

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