High Risk Processing Attorney
This is a core part of our practice.
The card brands consider certain types of business activities to be “high brand risk” merchant categories. This typically occurs in industries known to rely on deceptive advertising and unfair business practices.
Nutraceutical and skincare merchants are a prime example. They are known for:
- Making unsubstantiated marketing claims like “effortless weight loss” and “age-reversing”
- Employing free-to-pay conversions and continuity billing models without clear and conspicuous disclosures to the consumer
- Generating high chargeback and return rates
- Companies with a high risk of delayed liability such as cruise lines and small airlines
Acquirers and ISOs that board high-risk merchants engaged in fraud face potential liability from federal regulatory authorities like the Consumer Financial Protection Board and the Federal Trade Commission.
High-risk merchants in the nutraceutical and skincare verticals often find it near impossible to establish and maintain quality payment processing relationships.
In order to qualify for a merchant account, you must satisfy underwriting criteria – including fully disclosing your services, charges, and the complete terms and conditions of a promotion to consumers.
For example, merchants that rely on a “trial offer” model must employ an order process that clearly and conspicuously discloses: the length of the trial period; the fact that the cardholder will be charged unless they cancel the order within the prescribed period of time; the requirements of the cancellation policy; and the date the charges will commence.
This means that you must engage counsel to vet your advertising claims and billing disclosures for compliance. As high risk processing attorneys, we help high-risk merchants and the ISOs that support them navigate these issues.
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Frequently Asked Questions
A high risk processing attorney is a legal professional specializing in helping businesses categorized as high-risk by financial institutions manage payment processing challenges. They handle contract negotiations, ensure regulatory compliance, mitigate risks, and assist with disputes related to merchant accounts.
Payment processors and banks are concerned about high chargeback ratios that can lead to financial losses, potential regulatory non-compliance, and risks related to fraudulent transactions and money laundering. These factors increase scrutiny and can result in higher transaction fees, account holds, or termination of merchant accounts.
TFM Law provides expert legal support to manage chargeback disputes, get in touch with us now.
A high risk processing attorney can provide valuable support in mitigating the impact of chargebacks by offering the following services:
- Policy Review: Assess and optimize chargeback policies to reduce financial exposure.
- Terms of Service & Refund Policies: Craft clear, compliant terms and refund policies that help prevent chargebacks.
- Dispute Representation: Represent your business in chargeback disputes to recover lost revenue effectively.
- Preventive Strategies: Implement proactive strategies to reduce future chargebacks and maintain merchant account stability.
Contact TFM Law today to protect your business and minimize chargeback risks with expert legal guidance.
A high risk processing attorney helps businesses avoid fines and legal issues by ensuring compliance with PCI DSS, AML regulations, country-specific payment laws, and proper documentation practices. For more details, speak to our experts today!
Without expert legal guidance, businesses face increased likelihood of account freezes and terminations, higher chargeback rates leading to financial penalties, regulatory fines and legal actions due to non-compliance, and unfavorable contract terms with processors.
Businesses should consider consulting a high risk processing attorney when starting or expanding operations in a high-risk industry, experiencing frequent chargebacks or account holds, negotiating contracts with new payment processors, or facing compliance issues or regulatory inquiries.
TFM Law provides comprehensive legal services tailored to high-risk businesses, including
- Customized contract reviews to ensure favorable terms with payment processors
- Regulatory guidance to help clients comply with industry standards and financial laws
- Chargeback management strategies
- Risk assessment to identify and mitigate potential risks for smooth payment operations.
We are here to safeguard your business and ensure smooth, compliant, and efficient high-risk payment processing.