Attorney To The Rescue
I would bet that as an ISO you run into merchants from time to
time who cannot get approved for bankcard services because they have,
based on some previous experience, managed to get their business
listed on the Visa or MasterCard Terminated Merchant List. The
following letter from a Green Sheet reader may be a solution
for your business, so we print it just as received.
The highly competitive business of merchant bankcard processing
requires the ability to both procure and retain one's clients and
customers.
As a business transactions attorney, I have observed over the last
several years (1994-1997), that many existing or prospective clients
of banks and ISOs are listed on a Terminated Merchant File such as
those of MasterCard International or Visa USA.
Far too often, an ISO representative will set up what he or she
hopes will be a lucrative processing account only to be disappointed
when the merchant shows up on a terminated merchant file. A
terminated merchant listing basically makes the merchant a pariah or
leper for whom banks will not set up a credit card processing
account.
Unfortunately, when a merchant is listed, an important source of
revenue is lost by Banks, Bankcard Processing Organizations and
Associations, ISOs, Equipment Sellers/ Lessors, and the listed
businesses themselves. In short, terminated merchant listings have a
domino effect or wave, which ripples through the entire bankcard
processing industry and results in a huge loss of revenue.
To be sure, merchants who have actually committed fraud,
factoring, or some other risky and harmful practice should be listed
and scrutinized by the bankcard processing industry. However, there
are doubtless many legitimate merchants who through a mistake or some
appearance of wrongdoing have been listed on a terminated merchant
file. Ironically, these merchants are actually the type of clients
that many banks and ISOs would love to have as productive accounts.
But the stigma of the listing prevents the merchants and banks/ISOs
from having a mutually beneficial relationship.
Since
1994, I have had several business clients who were listed on a
terminated merchant file and unable to process credit cards, usually
MasterCard and Visa. After listening to my client's circumstances
surrounding termination (no fraud or wrongdoing on the part of
merchant) it occurred to me that the problem could likely be resolved
to everyone's benefit. So, I undertook to cooperatively
interface with ISOs, banks, bankcard associations, and Visa USA,
MasterCard International Security personnel to examine the client's
termination and attempt removal.
I am pleased to say that I have been able to remove all of my
clients from the terminated merchant listing with the cooperation of
the listing bank. Often these clients have gone back to the same bank
and ISO and opened new accounts. At the time of writing this story, I
am happy to say that my clients have reported no problems and there
have been no subsequent terminations of their accounts. Often,
previously terminated merchants are the most conscientious, low risk
clients, because they follow the letter of the processing agreement
procedure to prevent being listed again.
This is certainly no guarantee of results for either merchant
clients, banks, or ISOs. This is an illustration of how The Law
Office of Anthony L. Ogden has used diligent attorney inquiry and
cooperation to remove listed merchants and yield positive results.
Banks now have good accounts where they previously had negative
terminated accounts. ISOs are able to set up and retain valuable
customers. Merchants are able to produce more income by accepting
credit cards where they previously could not.
I strongly believe that there is a viable, relatively low risk or
controllable risk market of terminated merchants who would be valued
accounts for banks and ISOs. Careful examination of the circumstances
surrounding termination, and the removal of merchants where
justified, can increase the revenues of all businesses in the
processing industry chain-from bank to merchant. In short, everybody
gains.
Sincerely,
Anthony L. Ogden
310-278-2708
OGLAW@aol.com
[Go Back]