Merchant Account Underwriting Tools

Monthly Archives: October 2014

Something Familiar Here?

“Minnesota Attorney General Lori Swanson today filed a lawsuit against a Texas company—Apex Merchant Group, LLC (“Apex”)—for using “bait and switch” tactics through which it promised small businesses it could save them money on credit card processing services, then hit them with higher undisclosed fees. In some cases, Apex fraudulently altered the terms of signed contracts by later inserting new pages into the contract that contained higher rates and/or cancellation fees not agreed to by the small business, locking them into long-term contracts”.

The foregoing are allegations only.

“In 2002, the Federal Trade Commission (“FTC”) filed a lawsuit against a seller of credit card processing services, Certified Merchant Services, that was co-owned by Craig Frankel, one of Apex’s investors and brother to Apex’s current CEO, Andrew Frankel. Not unlike the allegations in today’s lawsuit against Apex, the FTC’s lawsuit alleged that the company made misrepresentations and fraudulently altered its customers’ contracts. Ultimately, in the FTC case, Certified Merchant Services was ordered to shut down”.

“The FTC filed its complaint in February 2002 against Certified Merchant Services, Ltd.; Certified Merchant GP, Inc.; Certified Merchant Services, Inc., and CMS-LP (collectively CMS); and Jonathan Frankel, Craig Frankel, and Randall Best of Plano, Texas. The companies also did business under the names Transaction Merchant Services (TMS), Transaction Merchant Services.Com, and Electrocheck. Jonathan Frankel and Craig Frankel were both officers and  directors of CMS. The Commission amended its complaint in June 2002. Defendant Best settled the Commission’s amended complaint separately. In both settlements, the defendants neither admitted nor denied the allegations of the amended complaint.”

Probably just a coincidence.

Fraudster NOT “convicted by FTC”

Contrary to a post seen on-line recently, Maurice Verrelli was NOT convicted by the FTC for fraud. That’s because the FTC does not “convict.” They “sanction” which is to say they obtain from the federal courts injunctions against fraudsters to force  cessation of unlawful acts. ( In this case $9.2 million was ordered for repaymentRead More


If I were a merchant underwriter I would look further into my portfolio than just these named and allegedly fraudulent accounts to see if there may be additional related accounts. The below businesses and principals are presumed to be devoid of guilt unless such is established by legal action. Following this list are other businessRead More

If It Didn’t Work the First Time

It might not work the next time either. In September  2007 Clayton Tracy Stewart was arrested by the USPIS and charged with obtaining credit cards using approximately 100  different profiles including aliases and addresses. Stewart subsequently opened merchant accounts in a variety of names and ran fraudulent transactions through these accounts using the fraudulent creditRead More


Which is best? As a merchant underwriter I think you’d rather see the scammers use the RCC s which take funds directly from the victims checking account rather than risk the chargebacks that lists of stolen card information run through a fraudulent merchant present. Glenn Erikson likes either method but got caught by the FedsRead More