Merchant Account Underwriting Tools

RECOLLECTIONS1

Per Wikipedia, a Blog can cover any subject, personal or business related.This particular post doesn’t deal with Merchant Account Fraud, but rather brings to mind some of my past investigations.

http://www.fbi.gov/phoenix/press-releases/2012/loan-originator-sentenced-to-10-years-in-federal-prison-for-leading-a-multi-million-dollar-mortgage-fraud-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=152012.

I had no connection with this one. Still, it is so typical, so un-imaganitive, that underwriters could have caught it.

What can a merchant account Underwriter learn from it? They can learn that the “patterns” of fraudsters rarely change:

Business name change. Principal’s names changes. New addresses, new phones: Even ‘new” products or services. What remains the same is the marketing approach. That is, targeting unsophisticated/desperate consumers; services that are not realistic; time limited offers; upfront payments; companies located in Arizona, Nevada, Utah, Florida.

Time after time I interviewed people living in depressed circumstance who had dealt with a broker who was:

” 1) overstating the borrower’s monthly income; 2) overstating the amount of money in the borrower’s bank accounts; 3) falsely representing that the borrower would make a down payment at closing; and 4) misrepresenting the intent of the borrower to use the property as a primary residence. Alexander and his co-conspirators would also alter Verification of Deposit documents to falsely overstate the amount of money in the borrowers’ bank accounts and alter the borrower’s credit report to falsely represent a higher credit score.”

With the fraudulent mortgage business down a bit, I see the same people moving into the sale of merchant accounts.

As a merchant Account Underwriter, you need to evaluate the past business history/practices of your salesperson and of the merchants they board.

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