Merchant Account Underwriting Tools

EVERYTHING CHANGES IN THE MERCHANT WORLD

EXCEPT fraud against processors.

“the collusive merchant is usually an existing business or store and works with an ISO and agent bank to obtain a POS terminal and merchant account for that particular business. The store truly exists ­ and so does the basement operation centre which becomes the nerve cell for the bustout operation. The merchant then establishes a number of other ‘new’ businesses in the basement of the store and works with the same ISO to obtain more POS terminals and merchant accounts for these fictitious basement businesses. Cardholders are then recruited to visit the basement where their (or other family members) credit cards are charged in various amounts taking the card over the established credit limit(s). The cardholder then issues a cheque ­ usually provided by the collusive merchant, to the issuer bank to pay down the overlimit amount and bring the account current. This of course is followed by another quick trip to the basement business to rack up more fictitious charges as the available credit has been adjusted by the amount of the cheque payment.”

An article from Andrea Wilson in 2003 that is is still pertinent today.

http://www.transactionworld.net/articles/2003/october/riskMgmt1.asp

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