ESTABLISHING YOUR OWN VISA/MC MERCHANT ACCOUNT

ATTENTION — LEARN FROM THIS SCAM TO PROTECT YOUR SELF IN THE FUTURE!

There was an advertisement and press release that started circulating in late November 1993 from Daron Fordham, Mail Order Merchants Exchange, phone (904) 322-2607. Daron claims that you can just pick up the phone, call the phone number and his company will set you up (the same day) with a merchant account. The cost is less than $50 per month.

Daron states: “The majority of mail order dealers are losing thousands of dollars in profits because their local banks are refusing to grant them merchant accounts. Mail Order Merchants Exchange, a mail order dealer discount products and services organization, will grant VISA/MC merchant accounts to new mail order companies for a small monthly fee.”

The very first question in your mind should be “who” gave Mail Order Merchants Exchange the “legal right” to grant these merchant accounts IF banks have refused to? Does Mail Order Merchants Exchange have higher authority than a real bank? I don’t think so. Has anyone within the inner-circle heard of this guy before? I’ve been in business 7 years and I’ve never heard of him!

But before you take my word for it, take a second of your time to personally call your own bank. Ask them what you have to do in order to establish a merchant account so you can accept VISA and Mastercard orders. Explain to the bank employee that you will only be receiving orders through the mail and not as a walk-in business.

Then, after you get the specifics, ask them if you can just run a charge through another business’s merchant account? Run down the street to Kroger’s and see if they’ll charge a purchase from your customer for your product and issue you a check to buy your groceries. Sorry folks — it doesn’t work like that!

It is our job to put a STOP to this type of activity. This new type of scam could escalate into something big if we don’t. Can you just begin to imagine the problems something like this can cause?

Let’s suppose you call Daron’s phoney business (which he claims was established in 1993) and set up a merchant account. You receive an order from a customer for $100 to be charged to their VISA card for a product you sell. You give your customer’s credit card number and expiration date to Daron and he could charge whatever amount he wanted to without you or your customer knowing until it was too late.

It’s impossible to determine the extent of Daron’s full intention since Mastercard CLOSED him down. His plan might have been to “get in” and “get out” quickly, obtain credit card numbers and authorizations to charge purchases for himself — then slip out of existence for awhile. Or, perhaps, he planed to make his money from the $50 monthly fees he collected from hard-working people like you.

You know as well as I do. If you establish a merchant account today it will take a little while to let your customer’s know about it and receive your first credit card order. Daron knew this too. And during this period of time you are still paying $50 per month and waiting on customers to charge a purchase with you, But Daron is making money and planning his escape. Don’t fall for this one and take the time to warn others before they fall prey! (Note to Daron: We’re not as stupid as you think we are.)

Here are a few REAL banks that are willing to doing business with people in mail order:

• Rancho Vista National Bank, 820 Escondido Ave, Vista CA 92083, (800) 433-2460
• Bank of Oakland, 360 14th St, Oakland CA 94612, (415) 763-6834
• Charter Pacific, 30141 Agora Rd, Agora Hills CA 91301, (818) 991-8512
• Rocky Mt Bankcard Systems, Inc., 950 17th St, Ste 735, Denver CO 80202, (303) 629-7755
• American Pacific State Bank, 16912 Devonshire, Granada Hills CA 91344
• Bank of California, 400 California St, San Francisco CA 94145, (417) 765-0400 (Merchant Relations Dept.)
• United Bank of Denver, 1700 Broadway, Denver CO 80274
• Central Bank Service Corp, 309 Captain’s Walk, New London CT 06320, (203) 447-3500
• Bank of Delaware, 300 Delaware Ave, Wilmington DE 19899, (800) 722-1172
• Bank South, Atlanta, PO Box 4387, Atlanta GA 30302
• Bank of Hawaii, PO Box 2900, Honolulu HI 96846, (808) 537-8111
• First State Bank & Trust Company of Park Ridge, 607-611 W Devon Ave, Box 718, Park Ridge IL 60068, (312) 692-4114
• The Central Trust Company, 201 East Fifth St, Cincinnati OH 45202, (513)651-8253 (minimum 1 year in business)
• Ameritrust, 4169 Pearl River, Cleveland OH 44109
• Michigan Bankcard Services, PO Box 30096, Lansing MI 48917, (800) 848-3213
• American National Bank & Trust Co, 8990 W Dodge Rd, Omaha NE 68114, (800) 833-2586 (midwestern states only please)
• The National State Bank, 401 Park Ave S, Linden NJ 07036, (201) 474-1043 (business must be located in New Jersey or New York)

Processors and Independent Sales Organizations

Some believe the following firms are easier to deal with than banks. However, the fee they charge merchants to process charge cards is usually higher than the fees charged by banks.

Automated Communications & Engineering, Inc, 2367 Agate Ct, Simi Valley CA 93065 (800) 678-5667 (provides 800 and 900 number system that takes orders and provides information to cardholders. Discount rates, based on volume available. Their system can reverse chargebacks.)

• Telecredit, 6301 W Idlewild Ave, Tampa FL 33614 (813) 886-5000
• T.J. Little & Co., 54 Stiles Rd, Salem NH 03079 (603) 893-9333
• Banc One Wisconsin Bankcard Corp., 1000 N Market St, Milwaukee WI 53202 (800) 824-8870
• Bankcard System Inc., 3880 Michelson Dr, Ste 200, Irvine CA 92715 (714) 733-0707
• Electronic Credit Card Systems, 236 W Portal Ave, San Francisco CA 94127 (415) 877-1557
• R.A. Mulhern Co., Inc., 1820 East Garry, Santa Ana CA 92705 (714) 252-1445
• Bankcard Inc., 1233 Sherman Dr, Longmont CO 80501 (800) 666-7575
• National Bankcard Systems, 1800 Silas Deane Hwy, Ste 54, Rocky Hill CT 06067 (203) 563-8292

Why?

Many of you may be asking “why” mail order businesses are so discriminated against when trying to obtain a merchant account. The reason is NOT because the bank, Visa or Mastercard dislike you. The reason has nothing to do with your credibility as a human being.

The problem lies primarily in the fact that a mail order business can open and close up shop tomorrow. And if a small mail order business owner dies before a customer gets his/her bill — the customer could refuse to pay it (called a “chargeback.”) This leaves the credit card company being left in the middle to pay the bill and absorb the loss. This situation may sound like “one chance in a million” to you — but things like this happens everyday and credit card companies (as well as banks) have to protect themselves.

So don’t get mad and out to seek revenge if your bank denies you. Just find another bank that approves you. It may be difficult — but it’s not impossible. Besides, if it were extremely simple for everyone to get a merchant credit card account — anyone could set up a fake business today; have their friends charge purchases on stolen credit cards; transfer the funds into their account; withdraw it tomorrow morning and be on the way to Mexico in the afternoon!

DON’T FALL FOR THE FREE MASTERCARD AND VISA RIP-OFF!

I’m sure you’ve seen them! You know the kind. They arrive in your mail from some “official looking” bank claiming that you have been Pre-Approved for a Mastercard or VISA credit card.

Of course, you don’t have to have any credit. You can even have bad credit or have just filed bankruptcy or even be rated as a “slow payer.” It doesn’t matter because these companies want to give you a second chance! Bull! This is a typical example of what I personally call “A Legitimate Scam” — something that can be done but has a hidden meaning that is non-appealing to the average consumer.

Why would companies want to make it easy for you to obtain a credit card? Do they like you? Do they want to help you because they know you have been through hard times and need a break? NO! They only want your money! You mean nothing to them!

How the thing works is that you must send $35 to receive an application that provides you with a name and address listing of banks willing to give you a VISA and/or Mastercard without any credit approval. That’s a stiff price to pay for a sheet of paper, don’t you think? The instructions that come with the application will let you know how the scheme works. You must open up a bank account with the bank once that bank approves you. Big deal! They make it appear that you have won some contest or something and people will feel “good inside” that someone has approved them.

But that’s not all. The minimum amount you must deposit is $200 but you can deposit as much as you want. In return, you get a Mastercard or VISA credit card with a credit limit up to the amount you deposit. Wow! What a great honor! This is no break! Think about it. If a stranger gave you $200 to hold for him until Friday wouldn’t you feel safe in granting them a $200 loan? I mean — it’s their own money you’ve got. If they default, you’ve got the full amount to pay off the loan. It takes a twisted mind to take $200 from you, grant you $200 credit with your own money plus charge you astronomical interest rates just to take the money from your hand and give it back to you. That’s insane!

Of course — to combat this insanity, the great and wonderful banks claim to help fix your credit report. They say that if you maintain payments in a correct fashion, this information will be reported to the credit bureau. Yea, right! When Shell calls the credit bureau to check your credit for a gas credit card, your report shows 47 defaulted loans and a bankruptcy. However, there is one company that you make payments to on-time. Big deal. Don’t you think the rest of your bad credit will still be the deciding factor in Shell’s final decision? You bet you bottom dollar!

Look at this: the bank makes money from the interest of your deposit. The bank also makes money by charging you 18% to 22% interest for the right to use their Mastercard or VISA. Plus the bank is guaranteed their money because if you don’t pay on time, they take the money out of the bank account you opened with them along with any interest you have accumulated.

Why would anyone with $200 to deposit want a credit card with a $200 limit? If you have $200 and want to buy an item for $200 — go out and purchase it. That way, you’ll own it lock, stock and barrel. No interest, no payments, no hassle! Plus, you won’t owe your soul to the company store — so-to-speak.

Credit is a wonderful thing if you use it intelligently. I know people who charge $100 at the beginning of the month and use that $100 to make $300. It’s free money for 30 days. Then, when the bill comes, they immediately pay the entire balance and come out smelling like a rose with $200 to the good. Credit is also needed in certain circumstances for establishing clout. You can’t call in a telephone order unless you can charge the purchase to your credit card. This delays you from getting items you want now.

In fact — some companies will try and make you feel “low class” if you don’t own a credit card. I am proud to say that I DON’T OWN one. When I’m in a store and they say “Would you like to put this on your charge?” I promptly say, “No, I pay for everything I buy!” They immediately shut up. And if they would snap back with a rude answer, I’d leave the stuff sitting on the counter, walk out of the store and get what I needed somewhere else. You don’t have to take abuse just because you don’t choose to line the pockets of the rich credit card companies! It’s insane!

If you’ve ever had a credit card and charged $200, you know you end up paying back $400 or more (unless you pay the balance within 30 days.) Stop allowing these “so called” banks to rip you off.

Your social security number is a unique identifier.  You are the only person who has that number.  But did you ever wonder what the numbers in your social security number mean?  This report will tell you exactly what those numbers tell about you, and how to effectively use social security numbers as a means of identifying your customers.

Your social security number is made up of 3 parts called the AREA (XXX), GROUP (XX), and SERIAL (XXXX).  I’ll explain these parts separately.  First, the AREA (XXX) has one of two meanings, depending on when you got your number.  If you received your social security card before 1972, the area number shows what state you APPLIED for your card in.  If you received your social security card after 1972, the area number shows the state you RESIDED in at the time you applied.

Here is a list of the number combinations and their corresponding states: 

900-999 Were used when state aid to the aged, blind, and disable was converted to federal programs administered by the Social Security Association, not valid social security numbers.

You will see that some states have more than one group of numbers.  This is because their original group of numbers became exhausted.

The GROUP (XX) has no meaning other than to determine whether or not a number has been assigned.  This is important to know, if you want to use social security numbers as identification for your customers.  Here’s how you should use this information.

Every month, the Social Security Association publishes a list of the highest group assigned for each AREA.  The order of assignment is odd numbers under 10, even numbers over 9, even numbers under 9 (except for 00, which is not used), and odd numbers over 10.  So, for example, if the highest GROUP assigned for AREA 999 is 72, then a customer who gives you the social security number 999-04-1234 is a fraud, because even GROUPS under 9 have not yet been assigned.

The SERIAL (XXXX) portion has no meaning and is not assigned in strict numerical order.  0000 is never used.

If you know what to look for, social security numbers are an important tool for screening customers.