Alleged $100 Million Credit Card Processing Case Results in Two Indictments
According to an article in Forensic News two people were indicted for allegedly engaging in bank fraud, specifically relating to credit card processing payments related to marijuana delivery service Eaze.com.
From our understanding of the case, it seems that the allegations center around setting up fake merchant accounts and websites to facilitate marijuana delivery. We aren’t focused on the political issues, but rather the mechanics of the alleged actions, including submitting fake company information, business category codes, and more.
For example, it’s alleged that the pair set up fake ecommerce websites outside of the U.S. but used domestic telephone numbers to appear locally based. Such sites could include online sales of soda and puppies, which may or may not exist according to arstechnica.com.
How Do I Make Sure This Never Happens to Me?
The website Eaze.com claims that they had no knowledge or responsibility related to the alleged actions. If your business processes on behalf of or use any 3rd party with separate credit card processing facilities, make sure to vet all potential partners very carefully. We recommend working with attorneys who will protect your interests.
When submitting a merchant application, make sure you don’t misrepresent anything about your business on the agreement. If you supply merchant category codes, double-check and make sure that they apply. Be clear about what you sell to customers.
Credit card processing reps are always fearful of having the agreements rejected by the risk/underwriting departments and losing their commissions. While most reps wouldn’t intentionally deceive their own companies into accepting merchants whose business types aren’t approved, there are enough who will cut corners. Remember, the agreement requires your signature to confirm that you have submitted accurate information. If the representative has filled out your company’s information, make sure to verify that it is correct. Besides potential legal issues, your company may face other consequences such as having funds frozen for up to 180 days, losing the ability to accept credit cards from all traditional processors, and much more.
Don’t Tackle The Credit Card Processors Alone
Since 2009, IdealCost.com has helped hundreds of companies nationwide reduce their merchant account fees through identifying and fixing hidden profit, overcharges, fake fees, and billing errors. Clients have saved $300-$20,000 per month on their credit card processing fees without going through the hassle of changing their processing vendor, bank, or equipment. Switching credit card processors should be a last resort, only reserved for funding delays, poor customer service, or technical difficulties. Before you consider switching credit card processors, see if you qualify for IdealCost.com’s monthly savings program be uploading your most recent merchant statement for a free analysis. You’ll receive an estimate within 24 business hours.
If you are opening a new credit card processing account or must switch credit card processors due to funding delays, technical issues, or customer service problems, feel free to contact us for a free consultation. IdealCost.com can help secure the best terms and fees based on your specific needs.