More Wells Fargo trouble, this time with merchant services

Businesses are suing Wells Fargo for allegedly overbilling, charging high termination fees, and engaging in deceptive practices. Is it happening to you?

Maybe, maybe not. Any business that uses Wells Fargo for their credit card processing might be getting overcharged, so it's worth checking.

I've mentioned in this sub before that I work in processing (but not for a processor) so I've had a chance to review quite a few Wells Fargo statements over the years. Here are some things to look for. (Links are to images of actual Wells Fargo snippets for easier comparison to your own.)

• Tiered Pricing. This is the pricing model with "qualified" and "non-qualified" fees. On Wells Fargo statements, you'll usually see it as "non-qual" and "mid-qual" like in this excerpt.

Tiered pricing is not exclusive to Wells Fargo and should be avoided with any processor.

• Interchange Clearing Fee. This one is sneaky because it makes it sound like the fee is, well, part of interchange. As you may know, interchange is the non-negotiable component of processing costs that goes to the banks that issue credit cards. Calling it an "interchange clearing fee" makes it sound like one of those non-negotiable fees, but in actuality, it's a Wells Fargo markup masquerading as an interchange fee. If you have one, you'll see it on your statement clearly labeled interchange clearing fee, as seen here.

It's possible for other processors to add an "interchange clearing fee" but largely it's a Wells Fargo creation.

• Billback Pricing. This is when a processor includes charges from a previous month on another month's statement, to obscure the total costs for a given month and make it harder to figure out what you're actually paying. However, you can usually spot it on a Wells Fargo statement if you see a previous month abbreviation in your current month's statement. For example, this snippet is from a February statement but includes January charges.

Billback pricing can also happen with other processors.

There are additional things to be wary of, including high markups and equipment leasing (both of which WF has been known to do) but these give you a starting point. If you're on billback or tiered pricing or if you have an "interchange clearing fee" on your statement, those are strong indicators that you're paying too much for credit card processing and may want to consider a switch.

Happy to answer any questions about processing in general or the WF lawsuit, though I don't work with or for WF or any of the businesses suing them.