Dealing on a more local level has its advantages
Take it from one businessman to another — bank on the “little guys” to manage your checking account.
Santa Monica-based Interior Space Inc. recently learned that dealing with a small bank may have saved the business money when a credit card processing company was charging it twice on a large transaction.
A judge ruled this month that Cardservice International Inc. overcharged the interior design firm by collecting fees on both the purchase and the subsequent credit canceling it.
Interior Spaces Inc. sued Cardservice International, Inc. in Santa Monica small claims court for the “double charge” on a $24,000 transaction made by a customer. But Cardservice International turned around and sued Interior Spaces for $3,000 in processing fees because the firm had closed its checking account before Cardservice International could seize the money.
And the only way Interior Spaces Treasurer Peter Canepa knew that the credit card processing company was taking more money than it was entitled to was because his bank’s vice president called him personally to alert him of the debits being made.
Knowing that Interior Spaces was having trouble sorting out the charges, Preferred Bank, located in Century City, called Canepa to tell him that Cardservice International was automatically deducting fees out of the account. The credit card processing company has a right to deduct money from their client’s account, but the client has a right to close his or her checking account, particularly if they are disputing the charges.
“It’s a good lesson for small businesses,” Canepa said. “If we were with Bank of America or Wells Fargo, no one would have called us.”
Austin Casey, senior vice president and the westside regional manager for Preferred Banks, said dealing with banks on a local level has its advantages.
“Small banks have all the information about the customer right there and officers are looking at accounts every day to get familiar with them,” he said, adding he has been doing business with Canepa for 15 years. “If there is something out of the ordinary, they will alert the customer.”
And while companies like Cardservice International Inc. has every right to take money from customer accounts, they also have an obligation to put it back in when they overcharge.
“They have a right to credit the account as part of the agreement with the customer,” Casey said. “They also have a right to debit the account.
“I think merchants have a right to know that.”
Originally published in the Santa Monica Daily Press print edition on January 16, 2002. Read the original PDF.