In a newly filed lawsuit in the United States District Court for the Eastern District of Pennsylvania, a small business—Advanced Surgical Associates—has accused payment processor CardConnect Corporation of systematically charging hidden, unauthorized “junk fees” that go well beyond the agreed-upon charges for payment processing services. These allegations strike at the core of a much larger conversation about corporate misconduct and power imbalances in late-stage capitalism, where financial institutions and merchants often operate at cross-purposes, and where vital consumer protections might be drowned out by legal technicalities and contractual fine print.

The most damning evidence, as outlined in the complaint, is that CardConnect purportedly:

• Coaxed small businesses into signing form contracts (Merchant Agreements) that only mentioned certain fixed or otherwise transparent fees.
• Failed to actually sign or have its banking partner sign these agreements—thereby arguably nullifying them, according to prior legal rulings.
• Secretly relied on a “Program Guide”—which was never provided to the businesses—to slip in new, previously undisclosed fees for compliance services, annual memberships, and other charges.
• Direct-debited these additional charges from the businesses’ bank accounts without ever giving them a chance to meaningfully opt out.

For small- and medium-sized merchants, these inflated and often inscrutable fee structures can be devastating. Modern commerce practically demands the acceptance of credit and debit cards, particularly post-pandemic as contactless payments and e-commerce took flight. If CardConnect’s alleged practices are true, hundreds or even thousands of merchants—many already operating on razor-thin margins—could have been forced to pay money they never contractually agreed to part with.

CardConnect’s situation is not wholly unique in the payment-processing industry. Similar controversies over “junk fees,” hidden surcharges, and hazy contractual terms pop up repeatedly in the sector—yet rarely do they garner significant public attention, as they are overshadowed by more headline-grabbing forms of corporate corruption. This new lawsuit, however, illuminates a deeper structural concern: how frictionless it can be for large corporations to siphon extra revenue from unsuspecting businesses under the guise of “compliance fees,” “security bundle fees,” or “annual membership fees.”

In the broader context, these allegations underscore the power asymmetries that define neoliberal capitalism—the deregulated environment that allows profit-maximizing enterprises to press every advantage, often at the expense of smaller commercial entities and, by extension, the communities they serve. Throughout this article, we will blend the explicit facts alleged in the complaint with an exploration of broader social, economic, and ethical dimensions tied to the lawsuit.

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Corporate Intent Exposed

The complaint states that CardConnect, headquartered in King of Prussia, Pennsylvania, solicits small business owners by presenting them with standard Merchant Agreements that highlight seemingly favorable rates for debit and credit card processing. Typically, the front page lists the “agreed-upon fees”—like a small monthly processing minimum, set per-transaction rates, and a couple of routine service charges. In a marketplace dominated by major players such as Square, Stripe, and PayPal, CardConnect’s initial pitch might sound appealing: a simple flat rate or a minimal percentage fee, possibly sweetened by promises of strong customer support.

But the lawsuit contends that CardConnect never actually executes—or has its partner bank sign—these Merchant Agreements, a direct violation of the document’s own stipulations that CardConnect’s signature (and Wells Fargo’s signature) is a condition precedent for the contract to become binding. Indeed, if CardConnect and its bank never sign, the complaint insists that the official contract has not “taken effect,” meaning that the hidden terms (tucked away in the so-called Program Guide) were never validly disclosed or accepted.

Key pieces of alleged evidence:

1. Unauthenticated Contractual Terms: The Program Guide is up to 50 pages of legalese. The lawsuit claims that CardConnect never presents it up front, leaving small businesses with no practical way to discover the “fine print” stipulations.
2. Surprise Debits: The named plaintiff in this case, Advanced Surgical Associates, complains of new “Annual Compliance SVC Fees” of $119, $199.99, or $215, plus other random monthly or annual membership fees. All were allegedly plucked from the Program Guide—terms the business never actually saw.
3. Prior Litigation: The complaint references Kao v. CardConnect Corp. (E.D. Pa. 2016), in which CardConnect was sued for nearly identical conduct. Despite court orders in that case clarifying that CardConnect was bound only to the fees enumerated in the Merchant Agreement, the new lawsuit alleges the company continues these disputed practices.

This alleged pattern of behavior suggests corporate intent: CardConnect’s business model seems geared toward hooking new merchants with an attractive, easy-to-understand set of terms, then quietly imposing additional or raised charges. While nearly every major payment processor has faced accusations of unclear billing, the complaint here draws a more pointed conclusion—one that CardConnect’s own contradictory contract structures appear to bolster. By not signing the Merchant Agreements, the company can effectively claim broad discretion to impose fees under a Program Guide that the merchant never saw. Meanwhile, small business owners, dependent on credit card processing to remain viable, often discover the unwanted charges only after CardConnect has already debited their bank accounts.

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The Corporations Get Away With It

Reading the complaint, one gets the impression that, even if CardConnect’s alleged conduct stretches the boundaries of acceptable industry practices, the company has so far faced minimal consequences. Merchants face an uphill battle just to recoup fees that, at first glance, do not add up to millions of dollars on a per-merchant basis—but collectively, across thousands of small businesses, can amount to substantial sums in hidden revenue.

Why does this happen?

• Complexity of Payment Processing: Between the issuing bank, acquiring bank, card association, payment processor, and equipment provider, there are many players—giving unscrupulous or profit-driven segments of the industry ample opportunity to obscure exactly what they are charging for, and why.
• Unilateral Direct Debits: If a small business notices a suspicious “Annual Compliance Fee” on its monthly statement, it may already be too late to avoid it. The money was withdrawn directly from its bank account in the prior billing cycle.
• Intimidation via Termination Penalties: The complaint notes that the Merchant Agreement calls for an early termination fee that can reach hundreds or thousands of dollars. Such steep fees naturally discourage merchants from closing accounts immediately, especially if they suspect it will spark further legal wrangling with the payment processor.
• Fragmented Oversight: Federal and state regulatory agencies do have some authority in policing consumer financial practices, but business-to-business relationships (like those between CardConnect and a merchant) often receive less regulatory scrutiny unless patterns of outright fraud are found.

Small business owners who want to switch payment processors typically confront the grim reality that they must again invest time, money, and effort to find and set up new merchant services. The friction involved—time-consuming cancellations, potential contract disputes, plus the intangible hassle of updating card processing systems—can be enough to dissuade them. So, the complaint’s allegations that CardConnect “slides in” new or higher fees might reflect a strategic calculus: a certain number of merchants will grumble but pay, a fraction will complain, and only a small percentage might try to litigate, which is usually cost-prohibitive on an individual basis.

In prior legal tussles, as described in Kao v. CardConnect, the courts established that a payment processor cannot simply conjure up new fees that are not clearly stated in an operative contract. Yet, the new lawsuit contends that these rulings have not deterred CardConnect. This underscores how corporations can “get away with it” when the payoff from imposing hidden fees outstrips the risk of legal consequences or PR damage.

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The Cost of Doing Business

It’s no exaggeration to say that credit/debit card acceptance has become the lifeblood of modern commerce. Small businesses that fail to accept these forms of payment often watch customers go elsewhere. This near-universal reliance on card processing can overshadow the fact that processing fees rank among the highest operating expenses for many businesses—sometimes trailing only labor, rent, and raw materials.

Key Impact Points:

1. Profit Margins Squeezed: The complaint references monthly or annual fees of $119, $199, $200, or $215, which might seem small in isolation. But if you are a boutique shop, a tiny e-commerce startup, or a partially retired professional (like the physician assistant in the complaint), such charges can become the difference between a profitable month and a net loss. Over the course of a year, or multiple years, these fees can be significant.
2. Forced Overhead: Once locked in with a payment processor, it is rarely seamless to jump to a competitor. Inventory systems, point-of-sale hardware, and website integrations often revolve around a single merchant services account. Changing providers might cost hundreds or thousands of dollars, plus lost sales during the switchover.
3. Legal Costs and Settlement: If a merchant chooses to sue or even threaten legal action to recover these fees, it faces attorney’s fees, court costs, and the intangible strain on the business’s time. Meanwhile, from a corporate perspective, paying out a settlement to a fraction of outraged customers might remain cheaper than fully refraining from questionable billing altogether.

When seen through the lens of neoliberal capitalism, these dynamics fit a pattern: large corporations can externalize costs and risks. The small merchant faces the time, risk, and capital burden to rectify the alleged wrongdoing, leaving the corporation free to continue raking in profits from the unsuspecting majority who do not muster the resources or will to push back.

This phenomenon also bolsters wealth disparity. Multinational corporations or deep-pocketed financial institutions—like CardConnect, presumably backed by well-capitalized parent or partner banks—have an advantage in legal battles against, say, a single physician assistant or a small boutique. The cost of a one-off settlement or even occasional litigation becomes a “cost of doing business,” while the real burden is borne by those who can least afford it.

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Systemic Failures

Why do these alleged exploitative tactics persist? One answer lies in the labyrinth of complex and overlapping regulations that govern the financial sector. Payment processors fall under an array of state and federal laws—some designed for consumer protection, others regulating financial services more broadly. Yet, the business-to-business nature of merchant services often slips through the cracks.

• Regulatory Gray Area: Government agencies like the Federal Trade Commission (FTC) or state attorneys general can investigate consumer fraud or anticompetitive practices, but small businesses are sometimes left to fend for themselves.
• Fragmented Legal Recourse: Some states have robust commercial protection statutes, while others do not. A single merchant in Nevada, as in the complaint, may be forced to rely on a patchwork of local consumer protection laws.
• Confusing Contractual Terms: Even if a regulator were to look into hidden fees, CardConnect can argue that these charges were disclosed in a Program Guide—albeit never signed or even seen by the merchant. The prior case (Kao v. CardConnect) purportedly found that the non-signed Merchant Agreements meant no enforceable contract had formed. Still, the system allows corporate defendants to repeatedly test the boundaries, dragging out disputes in the hope that plaintiffs give up or accept partial refunds.

Underpinning this is a lack of legislative clarity on just how transparent payment processors must be when listing fees, which fosters an environment where unscrupulous or borderline practices can flourish. The complaint’s language points to a bigger question about “systemic failures”—how many other payment processors similarly tuck away new fees in updated terms and conditions that merchants barely see? If these issues are so widespread, the entire industry could be saving billions of dollars through clandestine monthly charges.

In short, the allegations underscore a fundamental problem in late-stage capitalism: legal frameworks move more slowly than corporate strategies. By the time the judiciary might step in, thousands of businesses might have already surrendered to or become habituated to paying hidden costs. Reparation then becomes a painfully slow process—one that the average small-business owner might never undertake.

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This Pattern of Predation Is a Feature, Not a Bug

In reading the complaint, a pattern emerges that appears strikingly purposeful. Allegedly, CardConnect’s approach includes:

1. Hiding the real contract terms in a Program Guide never given to merchants.
2. Not signing the Merchant Agreements so that, if challenged, they might exploit legal ambiguities.
3. Auto-debiting from merchant bank accounts after the fact, thereby limiting the merchant’s ability to say “no.”

These tactics, if the allegations are true, are not an accidental glitch in the system. They may represent a core design of how CardConnect or other processors maximize revenue. The notion that this pattern is a “feature, not a bug” reflects a cynicism about how certain corporate operations function: they rely on confusion, complexity, and a merchant’s sense of inevitability to continue imposing inflated fees.

This scenario resonates with broader concerns around corporate greed. With payment processing now essential, small businesses rarely have the leverage or resources to negotiate for more favorable terms or engage in ongoing contract battles. And if one payment processor is too “difficult,” alternatives might not be significantly better—there is a sense that these fee practices are commonplace industry-wide, albeit in varying degrees.

Wealth disparity remains an important lens: big corporate players can treat unauthorized fees as “slippage”—small enough in single lumps to appear inconsequential but large in aggregate. Because only a subset of merchants will have the time to fight back, an environment emerges that systematically enriches the more powerful at the expense of local businesses and entrepreneurs.

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The PR Playbook of Damage Control

Although the new lawsuit is fairly recent, one might expect CardConnect to deploy a familiar PR script if the allegations attract national coverage. Typically, the PR “playbook” for large corporations facing class action complaints includes:

1. Denial or Minimization: Stating that fees were “properly disclosed” and that any confusion is due to the merchant’s own misreading of the terms.
2. Shifting Responsibility: Blaming partner banks, resellers, or third-party affiliates for “miscommunication.”
3. Promising Reforms: Announcing that “moving forward, we are clarifying our policies” or “enhancing our merchant support,” without necessarily offering restitution to impacted parties.
4. Settling Quietly: In many class actions, the defendant pays a lump sum settlement—often with no admission of wrongdoing—and includes legal language restricting negative publicity or future suits.

The complaint explicitly cites that CardConnect was already sued once before—Kao v. CardConnect Corp.—and the court there found that the company could only charge the fees listed in the Merchant Agreement. Even so, the new lawsuit says CardConnect is still imposing hidden fees, indicating how corporate PR can overshadow actual reforms. The company might have initially promised changes, but the impact on actual business practices appears negligible, at least based on these allegations.

Potential Consequences: If this case garners enough negative press or if multiple states’ attorneys general get involved, CardConnect might face broader scrutiny, which could force more transparent fee disclosures. Yet, as is often the case in the digital age, unless a story goes viral or a massive penalty is threatened, the public spotlight tends to move on quickly. Over time, many corporate misdeeds fade into the background, overshadowed by the next big scandal or political crisis.

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Corporate Power vs. Public Interest

Though the complaint stems from a dispute between a single physician assistant’s company and a payment processor, the stakes touch the broader public. Small businesses are integral to local economies, generating jobs and community wealth. When these enterprises are bled by hidden fees, the ripple effect can harm local communities:

• Economic Fallout: If smaller enterprises must continually pay unexpected fees, they pass on some costs to consumers through higher prices or cut back on staff hours, wages, or expansions.
• Stunted Growth: Startups that might have used limited capital to hire employees or invest in equipment could see those funds siphoned away by a steady drip of unauthorized charges.
• Disillusionment: Perceptions of systemic unfairness discourage would-be entrepreneurs from launching or scaling up. If the cost of entry is dealing with stealth fees and legal entanglements, that can hamper local innovation.

In purely financial terms, the lawsuit’s allegations hold that CardConnect effectively drains revenue from thousands of unsuspecting small merchants. From a corporate accountability perspective, there is also a moral dimension: for large corporations, the short-term gains from hidden fees can overshadow genuine ethics or fiduciary fairness to business partners. Indeed, what does that do to the public’s trust in the financial sector, already battered by repeated revelations of malfeasance from big banks and fintech companies?

At the policy level, one could argue that strict oversight of these relationships is required to protect not just individual businesses, but the broader public interest in a stable, transparent marketplace. Payment processing is as essential as water or electricity for a modern firm. If the gatekeepers controlling this service impose arbitrary surcharges, then arguably the entire community pays the price, not just the direct victims.

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The Human Toll on Workers and Communities

Though the complaint is primarily about business-to-business transactions, the real losers may ultimately be the local workers, families, and the broader networks that rely on these small- and medium-sized enterprises for income and services. In the case of Advanced Surgical Associates, the complaint depicts a scenario where the principal—who is partially retired—winds up fighting with CardConnect simply to recoup fees that appear nowhere in the Merchant Agreement.

Possible repercussions:

• Staffing Cutbacks: If hidden fees become burdensome, a small practice might scale back on staff hours. Although each monthly charge might be modest, overhead creep can accumulate, threatening profitability.
• Psychological Strain: Legal battles can be draining and demoralizing, especially for older professionals hoping to reduce work hours. The time spent combing through statements and lodging disputes with the payment processor could have been spent expanding or improving the core service of the business.
• Community Effects: For a physician assistant practice, inefficiencies or financial strain can degrade patient experience. Extra resources spent on unexpected “junk fees” cannot be reinvested in better care, more staff training, or improved facilities.

It is a subtle, under-discussed form of harm. Many think of corporate corruption in terms of big chemical spills or pharmaceutical price-gouging, but these everyday financial exploitations can be just as corrosive to the local economic fabric. Over time, they widen wealth disparity as capital is transferred from the community to a remote corporation that may not reinvest locally.

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Global Trends in Corporate Accountability

While the details of the complaint focus on alleged misdeeds by a U.S.-based payment processor, the phenomenon of stealth fees and hidden surcharges extends across borders. In the last decade, global controversies erupted over so-called “dark patterns” in e-commerce—user interface designs that manipulate consumers into unintended purchases or subscriptions. Payment processing, especially for cross-border transactions, is similarly prone to complicated fees—dynamic currency conversion, intangible “compliance” costs, and so forth.

Key global parallels:

• Neoliberal Influence: Countries with lax business regulations see an explosion in unscrupulous financial practices. Payment processors and other FinTech players can incorporate in friendlier jurisdictions, making oversight more difficult.
• Consumer vs. Business Protections: Many nations have robust consumer protection laws, but fewer have similarly robust measures for small businesses. If small merchants are not legally recognized as “consumers,” they might have to rely on contract law alone, which can be imbalanced in favor of large corporations.
• Class Actions on the Rise: The class action mechanism is unique to some jurisdictions, notably the U.S. It can serve as a critical tool for small entities to collectively challenge a big company’s wrongdoing. Yet globally, the availability of collective redress can vary widely.

In an era defined by global e-commerce, these hidden fee disputes highlight the continuing friction between innovators, entrepreneurs, and entrenched corporate structures. Some companies genuinely deliver valuable, efficient services at fair prices. Others, as alleged in this lawsuit, weaponize complexity to boost margins. Perhaps ironically, the ease of digital payments is precisely what makes it so easy for corporations to slip unauthorized charges past busy small business owners.

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Pathways for Reform and Consumer Advocacy

If these allegations against CardConnect hold true, the question remains: How can we fix a system that so readily enables hidden “junk fees”? Solutions must span both policy and grassroots spheres:

1. Enhanced Regulatory Oversight
   • Mandatory Transparency Laws: Just as food packaging must list all ingredients, payment processors could be legally required to present a clear, itemized breakdown of all possible fees in a single, short document that must be signed by both parties.
   • Strict Enforcement: Regulatory bodies (federal and state) should impose fines if companies fail to provide notice of changes within a specific timeframe, or if they do so in ways that are deliberately obfuscatory.
   • Stronger B2B Protections: Small enterprises often face the same vulnerabilities as consumers. Extending robust consumer protections to them—like capping certain fees—could level the playing field.
2. Civil Litigation and Class Actions
   • Strength in Numbers: Through class action suits, small merchants can pool their resources, making it more expensive for a corporation to forcibly resist. In this new lawsuit, if the class is certified, potentially thousands of merchants might seek redress for the same patterns of unauthorized fees.
   • Punitive Damages: If the court finds that the misconduct was willful, awarding punitive damages could deter future hidden fee schemes.
3. Industry Self-Regulation
   • Voluntary Codes of Conduct: Payment processors could adopt best practices that promise “no hidden fees” or “guaranteed upfront pricing.”
   • Public Accountability: If an industry-led watchdog systematically audits payment processors, those that adhere to best practices might earn a “transparent processing” seal, making them more appealing to merchants.
4. Technology Solutions
   • Real-Time Notifications: Requiring a push notification or text message whenever new fees are introduced or raised. This ensures small businesses do not discover new charges after the fact.
   • Comparative Platforms: Encourage the development of aggregator services that let merchants compare real-time fee structures among competing payment processors, promoting price transparency.
5. Grassroots Advocacy
   • Small Business Coalitions: Local chambers of commerce, trade associations, and other networks can educate members about common pitfalls. By raising awareness, small businesses might better recognize red flags early on.
   • Social Media Pressure: In an era of instant viral communications, a critical mass of small business owners calling out CardConnect’s alleged practices on LinkedIn, Twitter, or specialized business forums could drive reputational damage—putting pressure on the processor to change.

Ultimately, this class action complaint represents more than a contractual spat. It is a case study in how corporate power can overshadow the small business. With the near-monopolistic hold that credit card acceptance exerts on commerce, unscrupulous or poorly regulated payment processors hold an outsized influence over the fate of entrepreneurs. While the lawsuit may or may not result in significant restitution for those impacted, it has at least cast a spotlight on systemic vulnerabilities that demand deeper structural reforms.

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CardConnect’s website is https://www.cardconnect.com

CardConnect is based out of 1000 Continental Dr #300, King of Prussia, PA 19406

CardConnect’s Instagram is https://www.instagram.com/card_connect/

CardConnect’s LinkedIn is https://www.linkedin.com/company/cardconnect