NORTH TEXAS (CBSDFW.COM) – A North Texas man is worried his small business may not survive because his credit card processing company is holding more than $7,000 of his money. When he couldn’t get answers, he called CBS 11’s Cristin Severance for Consumer Justice.
Scott Newberry owns and operates a fireplace installation and repair company called A Safe Home.
He’s been in business in the North Texas area for four years and accepting credit cards through the credit card processing company Square for two years.
“It’s just a convenience to help our customers,” said Newberry who estimates he’s run more than $100,000 in transactions using the service.
Newberry has had no complaints until last month when he said he tried to buy parts and his card was declined.
He immediately checked his account.
“It said pending, pending, pending. I quit adding it up after $7,000, I’m like ‘well no wonder I don’t have any money.’ Square has my money,” said Newberry.
Square told Newberry they were holding his money because of a chargeback and his large volume of transactions.
Newberry said he sent them his bank records but they requested additional information.
“They said, it’ll take 30 to 90 days to get your money but keep using Square! And I’m like ‘what?,'” said Newberry. “I told Square ‘look I can’t buy my fireplaces, this is going to shut me down.'”
Consumer Justice found more than 1,600 similar complaints about Square through the Better Business Bureau. According the the San Francisco BBB, where Square is headquartered, the company still has an A+ rating because of their responsiveness and having no other issues.
Our Consumer Justice team talked to a small business owner in Santa Barbara, California who said Square held $20,000 because of “high risk activity.” She said when she tried to call the company and ask questions, she was told only customers with active accounts could talk to someone over the telephone. She said she eventually wrote the company’s CEO a letter and got her money after 90 days of waiting.
A Square spokesman told CBS 11 in a statement:
“While we don’t comment on individual accounts, we often work closely with sellers, via phone and over email, to collect information about their business so they can keep using Square. But sometimes, when we don’t get enough information, we hold funds for a period of time that allows us to protect against the risk of chargebacks. Such holds on funds are rare, but they’re an important tool in making sure we protect everyone involved in the transaction from a potential dispute. It is always our goal to resolve any account issues as quickly as we possibly can.”
Newberry said he’ll be switching to another credit card processor if he’s still in business by the time he gets his money back.
“It’s like having your hands tied and somebody strangling you and you can’t do nothing,” said Newberry.