Initial Merchant Due Diligence

Some relatively new FTC guidelines (March 2013) clarify the required disclosures that on-line merchants must follow. http://www.ftc.gov/opa/2013/03/dotcom.shtm. It is incumbent on the acquirer to know how, as well as what, its merchant is marketing. http://www.acquirerrisk.com/blog/?p=563
“The FTC’s use of the broader “unfair or deceptive acts” prohibition emphasizes that the FTC has the card processing business in its sights.” Timely quote from http://www.electronicpaymentslaw.com/ . Another insightful opinion on the subject can be seen at http://www.responsemagazine.com/direct-response-marketing/legal-review-ftc-sues-payment-processors-misdeeds-their-6026.
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? http://www.acquirerrisk.com/blog/?p=563.
As an ISO or acquirer you already know how to manage the purported risk level of your merchant’s products/services. What you may not know is the merchant’s past history of fraud and how he might circumvent your standard monitoring processes.
Would initial proper due diligence on known high risk merchants mitigate the wrath of some subsequent FTC inquiry?
For fifteen years Acquirer Risk Management Solutions, Inc. (ARMS) has conducted in-depth evaluations of higher risk merchant principals and has identified numerous serial merchant account fraudsters who return to the trough despite regulatory sanctions against them.