Any and every high risk credit card processor experiences countless fraudulent merchants attempting to get a merchant account, as often as a weekly basis. Some processors even fall victim periodically to the more sophisticated criminals. It really is a constant battle that knows no end.
Recently we read a terrific piece about the tech support industry – an industry for which we offer merchant processing solutions on a case-by-case basis – published by Payments Journal, detailing the latest scam and how it impacts merchant services providers.
In a nutshell, a consumer receives a popup message informing them their computer has a virus. The message also provides a telephone number – nothing like P2P customer support, right? When the consumer calls, the ‘tech support’ representative, likely operating in a very large call center overseas, informs the consumer they are affiliated with either Apple or Microsoft, and are able to fix the issue for a hefty sum, usually in the range of $200-$300 USD.
Many consumers – even savvy consumers – fall for this tactic. Fraudsters prey upon those consumers who reason:
- ‘I’d better do this before I lose any important photos.’
- ‘Just pay it and get it over with.’
- ‘I’m in a rush. No time to investigate.’
The Payments Journal article conjured up a recent exchange with a merchant who approached us about getting credit card processing. There was something off about it.
A popular sentiment with which we disagree
Recently, we were discussing the subject of underwriting and suspicious merchants with an industry colleague. We had had a merchant complete the pre-application and application processes and furnish us with each of the KYC documents we require. Throughout the process, we had the necessary initial conversation with them about their business, and exchanged several e-mails on some minor details.
Something about the merchant’s business model, in our opinion, didn’t sit well with us, and we voiced our opinion to our colleague, whose response caught us off guard: ‘You can only do so much.’
Especially in the current climate, every high risk credit card processor is obligated to perform diligent underwriting procedures because, according to the Payments Journal news item, the penalties for PSPs that offer merchant accounts can be severe.
That merchant we mentioned? Based on our full risk assessment, we declined his business.
Step one in separating legitimate merchants from bad actors
It’s no secret that merchants who partner with Instabill experience our live customer support and our value of direct, P2P conversation. Aside from asking the necessary questions to determine whether we have a solution, a simple conversation, we feel, allows us to more effectively vet prospective merchants in several ways:
- Viability: For starters, is the business model even profitable?
- Evasive merchant: Is the merchant difficult to reach for a conversation?
- Questionable payment method: The merchant may request a payment method that may not make sense (such as a MOTO solution for a nutraceutical business).
- They object: The merchant’s objection to adjust to a bank’s suggestion to change their model or payment method.
- Possible transaction laundering: Noticeably high ticket prices for products or services consumers can find elsewhere for far less expensive (one experience stands out for us).
- Website issues: Broken links, overt use of stock images, missing images, and other signs it was hastily designed.
Prospective merchants can expect that we will address each of these issues accordingly. By speaking one-on-one with merchants, we can eliminate a vast majority of bad actors. The monitoring doesn’t end with the approval or decline, however.
Underwriting shouldn’t stop at the approval
We feel this is one of the qualities that separates us among our high risk credit card processor colleagues. Instabill has underwriters on staff that perform random checks mainly to make certain our merchant partners are processing transactions seamlessly with minimal chargebacks and returns and consistent sales, from which all parties win. But we also look for the irregularities, some of which are noted above.
We’re a high risk credit card processor that loves talking merchant accounts
Instabill is a high risk credit card processor that continues to value live customer support and one-on-one conversation, enabling us to establish relationships with our merchant partners while screening prospective businesses for our acquiring banking partners and the card brands. Our merchant account managers are always game to talk about the possibilities of your e-commerce business at 1-800-530-2444.
Instabill staffers are available Monday through Friday from 8 a.m. until 6 p.m. U.S. eastern time.