Merchant Account Underwriting Tools

More Merchant Due Diligence Required

Acquirer Risk Management Solutions, Inc can assist ISO s in complying with the increased likelihood of government intervention.

“Payment processing companies must respond to this increased regulatory scrutiny or risk being held accountable for merchant activities that result in harm to consumers. They should consider implementing additional monitoring and security procedures, many of which have been imposed by the FTC on merchant processors in connection with recent enforcement actions, including:

Screening prospective merchants beforehand, including obtaining specific background information and references, assessing the accuracy of such information and performing a review of the prospective merchant’s marketing materials;

Carefully evaluating whether to allow the use of RCCs, RCPOs or other similar “novel payment methods” that the FTC claims have been used in ways that harm consumers;

Ensuring that the processor has contractual rights to suspend or terminate a merchant for failure to comply with contractual requirements and applicable laws;

Monitoring merchant transactions and representations by, among other things, performing regular reviews of merchants’ websites, and monthly calculations and evaluations of merchants chargeback and return rates;

Investigating accounts of merchants whose chargeback and/or return rates exceed specified levels and, depending on the results of the investigation, the levels observed and the nature of the merchant’s business (certain merchant businesses pose greater concerns to the FTC), terminate the processing relationship;

Declining to provide payment processing services on behalf of merchants that sell goods using negative option features, such as free or introductory price trial offers, continuity programs or automatic renewal plans in which consumers continue to be charged for goods or services after inception unless they cancel by a certain deadline.”

http://www.law360.com/articles/498664/payment-processors-in-the-regulatory-crosshairs

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