Credit card laundering is the misuse of a “merchant account” with a financial institution. A merchant account is a kind of bank account: it is what a seller or telemarketer needs to gain access to a credit card collection and payment system and to get cash for goods and services sold. Obtaining access to the credit card system through another’s merchant account without the authorization of the financial institution is credit card laundering. This practice violates the TSR, and is a criminal offense under federal law and the laws of some states.
Here’s how the system works for companies that make legitimate use of the credit card system: To be able to accept payment from a consumer who wants to charge the price of goods or services to a credit card, a seller or telemarketer must have a “merchant account” with a financial institution that is a member of a credit card system (for example, Visa or MasterCard) that issued the consumer’s credit card. Continue reading “Express Informed Consent Is Required in Every Telemarketing Transaction”