By Adam Atlas
Attorney at Law
A processor and two of its ISOs walk into a bar. Only one ISO walks out. What happened to the other ISO? In violation of its confidentiality obligations to the processor, the foolish ISO divulged to the wiser ISO the buy rates set forth under its processing agreement. So the processor terminated the careless ISO right there in the bar, leaving only one ISO standing.
As an ISO or merchant level salesperson (MLS), are you likely to be the one terminated or the one left standing? Adhering to terms of your ISO agreement makes all the difference.
An older, seasoned lawyer once told me that there is no such thing as a secret. Information tends to zip around pretty quickly these days, but that does not take away from obligations of confidentiality that prohibit the circulation of some of that information. The purpose of this article is to remind readers of several key confidentiality obligations that typically apply to ISO and MLS businesses.
Following are several confidentiality and other concerns to consider. In these examples, the term ISO refers to both ISOs and MLSs:
1. It reinforces one or another party's title to information.
2. It prevents one or another party from using or disclosing such information without permission from the rightful owner.
Like many clauses in ISO agreements, the confidentiality clause is grounded in common sense. Most parties acting in good faith are likely to comply with it, even if they have not read it.
That said, it is worthwhile to read and understand each clause in your ISO agreement, and that's no secret.
In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, seek the services of a competent professional. For further information on this article, email Adam Atlas, Attorney at Law, at email@example.com or call him at 514-842-0886.
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