I have worked within the industry for the past eight years, and it seems like I'm running into more and more salespeople taking advantage of using improper MCCs [merchant category codes] to lower interchange levels for merchants.
For example, I have seen car washes set up as gas stations, so the result is the merchant ends up paying a lower interchange level. But I know this isn't ethical. Another example is oil resellers who only sell heating oil being set up on the utility MCC code; the end result is the merchants pay much lower interchange levels.
What can I do to prove to merchants that this practice is unethical, and they could get in trouble for doing this? And who exactly should I report the salesperson to? We have enough cheaters and liars in this industry. I want to start doing something about it
Luciano Di Felice
Advanced Payment Solutions LLC
We referred your question to Adam Atlas, a veteran payments industry attorney. Following is his response:
Whether or not a merchant is aware of the scheme arranged by the agent, the merchant is also potentially exposed to liability for operating under the wrong MCC.
There are two solutions that you might try. One is to inform merchants that they are exposing themselves to potential termination by their acquiring bank for using the wrong MCCs. The second is to send a whistleblower e-mail to firstname.lastname@example.org.
I have seen that e-mail used as a place to send whistleblower information concerning agents acting in ways that are outside the law or rules applicable to our industry.
Of course, you cannot be assured that either of these approaches will work.
I'm rather new to the credit card processing industry and currently work ... as an account retention manager. This is great, ground floor industry training, but my goal is to eventually work in the card fraud sector of the industry. I would like to know what industry organizations offer seminars or educational opportunities, including online training if available. If you can offer any advice, I would greatly appreciate it. Thank you for allowing me to join your outstanding Web forum.
XtraValue Payments Inc.
Welcome to the payments industry, and thank you for joining GS Online's MLS Forum. Following are five educational resources pertaining to fraud prevention:
1. The Fraud Practice offers in-house and remote, webinar-based training options on a variety of topics. (www.fraudpractice.com/training.html)
2. The International Association of Financial Crimes Investigators, Nevada Chapter, is holding its 2010 Training Seminar Summit on Fraud, Sept. 8 to 10, 2010, in Las Vegas. (www.iafci.org/web/home/am/contentmanagernet/contentdisplay.aspx?section=home&contentid=8716)
3. Mares & Co. offers instruction on how to use the programs in Maresware: The Suite, which includes programs for computer forensics, data analysis and information security. (www.dmares.com/maresware/training/maresware.htm)
5. The Bank Training Center provides training via online courses, webcasts, webinars and audio conference. Topics include fraud prevention pertaining to credit cards, checks, Internet payments, phishing, identity theft, new accounts, deposits and information system breaches. (www.banktrainingcenter.com/fraud.asp)
In addition, the Electronic Transactions Association's ETA University recently launched the ETAU Online Payment Essentials, a series of four courses covering industry basics, including Sales Channel Development, Introduction to Electronic Processing, Introduction to Sales and Marketing, and Introduction to Operations.
Best of luck to you.
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