4 Things Merchants Should Know About Credit Card Laundering

by Francine Gallacher      Business Phones International is a company that deals with office telephone products and accessories. It is based in Asia. Due to its good reputation, it enjoys brisk business since it started five years ago. To keep up with the ever increasing number of customers worldwide, Business Phones International has credit card processing services. This allows them to accept cards from customers making purchase orders from the Business Phones' merchant website. It's founder, Mr. Tim Dressler, owns the company.      One day, another business man by the name of Mark Evans came to see Mr. Dressler. Mr. Evans just opened his computer store. He claimed he has already applied for credit card processing service but the processing of his ecommerce application could take some time. His computer store was already open for business and customers are making purchase orders. Mr. Evans wanted to accept cards. He wanted to use Mr. Dressler's merchant account to process purchase orders. In return, Mr. Evans offered 30% share of the profits on every purchase orders from his computer store.      This act is called credit card laundering.      Credit card laundering, also called factoring, is allowing a person or a business entity to use the legitimate merchant account that belongs to another. You should not accept cards in behalf of another. The law strictly prohibits this illegal business practice. Here's why.     First, if you have a legitimate merchant account and you let someone else use it to process orders, you run the risk of terminating your account. You see, your account will soon reflect huge sales increase and banks consider such surplus sales as potential cause of fraud. They want to protect themselves from losses. So these merchant banks will freeze your account or terminate it without notice.     Secondly, credit card “factoring” is an outright violation of your merchant agreement. You will be blacklisted from financial institutions. And if this happens, you can no longer get any credit for your business.     Thirdly, you could end up paying for the chargebacks incurred by the “ other” business transactions. Aside from shouldering the costs of these chargebacks, you could lose your merchant account.     Lastly, you will be criminally liable for credit card laundering.      To protect yourself against these risks, do not accept cards in behalf of another person or business entity. Never ever engage in credit card laundering or factoring. Francine Gallacher is a seasoned Wall Street consultant with extensive experience on credit card-related scams. She finished her Business MBA at John Hopkins University and currently works in a prestigious Fortune 500 consulting firm. Miss Gallacher serves as business consultant for many credit card processing service providers, including <a href="http://www.acceptcardsnow.biz/">www.acceptcardsnow.biz</a>. She is a prolific writer for several business magazines and contributes articles on various financial topics. She can be contactd at franchinegallacher@gmail.com.<a href="http://www.onlywire.com/submit?u=http://www.acceptcardsnow.biz/4_things_merchants_should_know_about_credit_card_laundering.html;t=accept%20cards;tags=accept%20cards" target="_blank" title="Add this Article to Onlywire"><img src="http://www.onlywire.com/i/onlywire.ico" alt="" />Add to Onlywire!</a>

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4 Things Merchants Should Know About Credit Card Laundering