Household HSBC Watch

Our headlines screamed: “HSBC posts Boscov payment one day late” and “HSBC loses customer for Boscovs due to late payment processing” and “Boscovs and HSBC Forgets To Mail December Bill.” Now Boscov’s has filed for bankruptcy. The formula is simple: When a merchant signs a contract with HSBC for credit card processing we ask if the merchant is in trouble. It was no different with Boscov’s, and the answer was the same - YES.

HSBC offers a little bit more with their credit card processing offers to merchants. And why not, when you can process payments one day late, demand extra fees for paying online, by phone, or within five days of the due date? However, the day will come when a lawsuit might present RICO changes for HSBC merchant services and the merchant. Is extortion a lousy way to do business, or is it racketeering? Remember, racketeering charges were filed against H&R Block and HSBC (Household International / HSBC Taxmasters.) If the merchant - in this case Boscov - gets part of a late fee for a payment that was not late, is that racketeering, just shady, or the act of a troubled merchant grasping for nickles, dimes, and straws?

One thing is clear - another HSBC merchant turned out to be a troubled merchant as predicted, and Boscov has declared bankruptcy. For a merchant thinking of the prospect of signing with HSBC Merchant Services — Don’t do it. Your investors will immediately ask why. Are financial troubles lurking? Are executive decisions questionable? And from a legal standpoint, are you the business the FBI will try to flip on a RICO case?