Attorney General's News Release

May 30, 2007

Nixon sues Kansas City company that scammed small businesses in sale of credit card processing equipment

Kansas City, Mo. — Attorney General Jay Nixon has filed a lawsuit seeking restitution and penalties against a Kansas City company that repeatedly violated Missouri consumer protection laws in the sale of credit card processing equipment to small businesses. Nixon’s lawsuit against First Capital Bankcard Inc., and its president, Ryan Paine, filed on Tuesday (May 29) in Jackson County Circuit Court, is also seeking preliminary and permanent injunctions.

Since 2003, First Capital Bankcard has been in the business of advertising, selling and leasing credit card processing equipment and related services to consumers in Missouri and other Midwestern states. Nixon says the defendants engaged in deception and fraud, by misrepresenting that:

• Consumers could cancel contracts for leasing the merchandise within a certain time from the date of signing the lease;
• Consumers would be granted a free trial period to use the merchandise and would not be contractually obligated if not satisfied with it;
• First Capital Bankcard would buy back, cancel or transfer the consumer’s lease to another person if the consumer was not satisfied with the product;
• The fees and costs associated with the consumers’ use of the merchandise would be less than they actually were;
• Consumers who complained to the company would receive a full refund; and
• (to third parties) Consumers had defaulted on contractual obligations, resulting in false, derogatory credit reports to credit reporting agencies regarding consumers’ credit histories.

Nixon says his office received approximately 35 complaints about the defendants, with individual losses ranging from several hundred dollars to as high as $2,000.

“Running a small business is challenging enough without having to worry about someone scamming you through the sale or lease of merchandise as the defendants did in this case,” Nixon said. “We’ll make sure they are held accountable for the manner in which they defrauded consumers.”

Nixon’s lawsuit requests that the court issue an injunction against First Capital Bankcard, barring the business from continuing to violate Missouri’s consumer protection laws. The Attorney General is also asking that the court order the defendants to pay restitution to compensate consumers who suffered losses due to the defendants’ conduct, appropriate penalties and court costs.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818