Marketing Compliancy
Reduce The Chance of Being Audited and Fined Through Advanced Compliancy Measures
Visa, MasterCard and governmental agencies have begun rigorously enforcing existing and new rules and regulations for marketing compliancy. Merchants that are non-compliant open themselves and their ISO/Bank up to fees, fines and extra scrutiny.
Compliancy Issues
There are 2 types of Compliancy that ISOs/Banks and Merchants need to be concerned about:
- PCI DSS Compliancy deals with the processing and storage of credit card data. Chargeback Guardian does not assist with PCI DSS Compliancy. Please see our Resources section for links to companies that can help your Merchants with PCI DSS compliancy.
- Marketing Compliancy deals with adhering to Visa, MasterCard and governmental rules. These rules range from the type of product that is marketed to the way the information is marketed to the consumer.
There are generally 3 types of non-compliant Merchants:
- Those who are unaware of the rules and regulations.
- Those who are aware, but do not feel that some of the rules apply to them.
- Those who are maliciously trying to perpetuate fraud.
Most common ways Merchants are not in compliance with Visa, MasterCard and governmental regulations:
- Negative option marketing with reoccurring billing.
- Use of "Free Offers" when the consumer must pay for anything, including shipping & handling.
- Cagey or unclear refund policies.
- Sharing of customer and card data without consumer authorization.
- Pre-checked boxes that assume customer consent.
- Transaction splitting.
- Up selling or cross selling without customer consent.
- Use of return policies that set unrealistic time periods or create obstacles for consumers to cancel an order.
- Use of terms or conditions that are poorly disclosed or fail to comply with the FTC's recommended marketing practices.
- No Disclosures on a merchant's website stating that speaker endorsements are fictitious.
- Use of bogus celebrity endorsements.
- Frequent merchant descriptor name changes or use of multiple merchant identification numbers.
- Facilitation of "load balancing" to artificially lower chargeback counts.
- Use of small dollar transactions to artificially increase transaction counts.
- Use of multiple acquirers.
- Multiple merchant applications from LLC shell companies or from principals in the same geographic area.
Our Compliancy Tools Are Proactive, Dynamic and Flexible
Tools that assist Merchants in becoming and remaining compliant are extremely important. It is also important that these tools are tailored to the Merchant's business type. Otherwise some Merchants will only comply until they can find a way to circumvent the rules; especially those rules that are viewed by them as being restrictive and damaging to their business.
Most Processors have varying levels of compliance criteria based on the Merchant's risk type. Some Merchants do not understand why they are being asked to achieve certain compliance criteria. While compliancy rules may make perfect sense to those of us that work in the payments industry, to Merchants they can seem to be controlling and without purpose.
Chargeback Guardian can assist you in developing criteria that is customized for your Merchant's risk level, based on Visa, MasterCard, and FTC rules and regulations.
Chargeback Guardian takes the approach of getting to know and understand the Merchant's needs while applying the criteria needed to protect the Merchant and their Processor.
Compliancy Steps:
- Understand the Merchants product, service and business model, from the Merchant and consumer's perspective.
- Conduct "Best Practices" reviews of both the Merchant's website and business operations.
- Provide feedback to both the Merchant and the Processor on any areas that fail compliancy and provide support for the Merchant while they correct those areas.
- Monitor the Merchant's website on a regular basis for any changes in compliancy.
- Monitor and analyze transactional data to help identify results-based issues that website monitoring does not catch.
