Merchant Account Underwriting Tools

Monthly Archives: June 2013

Do You “Assist and Facilitate” Fraud?

Do you “consciously avoid knowing” that your merchant is engaging in unlawful practices? Are you providing a merchant with processing services without which it would be impossible for a scammer to charge consumers?

Federal Regulations have long noted the importance of proper initial due diligence in boarding merchant accounts.

How would you as an ISO or processor react if your name and company were substituted for the defendants in this recent FTC filing?

You might want to take time and read the allegations.

In retrospect would it have been worth spending $75.00 or so with us to get a full background report on principal and business, as well as an on-site visit with photos and copies of scripts, licenses and other appropriate documents?

Would initial proper due diligence on known high risk merchants mitigate the wrath of some subsequent FTC inquiry?

Does It Take a Crook to Catch a Crook?

It certainly worked for Frank Abnagale of “Catch Me If You Can” fame and, for a while, Barry Minkow of the ZZZZBest zaniness. Perhaps the same model can work in the underwriting of merchant accounts. A recent entry to the merchant account world is Consumer Confirm, LLC which is, according to their corporate filing,Read More

“The Patterns of Fraudsters Never Change”

Well, only slightly. APEX MERCHANT SERVICES, L.L.C. was formed in 2000 by Roger K. Howard. Then, in 2003 Roger K. Howard was convicted of fraud in federal court and sentenced to fifteen months in prison. (See Case 1 below). By letter of October 7, 2007 his probation was released. Sometime after 2001, Roger K. HowardRead More

Charity Fraud – They’re Processing Somewhere

As a pre underwriter for acquirers who board non -profits, foundations and charities I was interested in this study: I get calls on my “do not call” numbers weekly from these type of worms. “ Hey Everett, good buddy, how you doing. I’m just calling from over here at Wherever to see if youRead More

“A Recognized Way of Combating Fraud”

Here’s a new way for underwriters to view merchants who set up shell companies with mail-drop addresses and straw owners to trick merchant banks into setting up new merchant accounts. According to a lawyer for I Works, “by creating different entities, they would be able to identify more easily who was committing fraud against them.Read More

A Great Combo: Magazines, Collections, and Cancellation Fees

What better material could an underwriter have to work with? This “merchant” has been operating since around 2007 and chargebacks didn’t bother the processor? Hmmm. First you buy a “list.” Then you tell consumers you are calling to verify and update their magazine accounts and con them into giving up personal information and “verifying” aRead More

No Matter How Hard We Risk Managers Try

We cant always protect our employers or clients from themselves. I was recently reminded of a talk I made to a local civic group many years ago about the role of the FBI in preventing and prosecuting advance fee schemes. I outlined the danger signals to watch for in attempting to get funding from alternativeRead More

My first job out of UNC was that of underwriter

Quite an event for an English literature major. But it was not what you merchant underwriters might think. The timing of this event coincided with a more remarkable event that has affected us all. The launch of the Bankofamericacard, which became the first successful recognizably modern credit card generally accepted by a large number ofRead More