There are plenty of stories available about the processors of credit card freezing funds and terminating merchant accounts. Almost all of these stories show the credit card processors in the negative light as the one who is trying to steal money from the owners of small business. While this makes the story interesting, it is not accurate.

It is the responsibility of the “Credit Card Processors” to protect the merchants and the card holders from credit card fraud. The starting signs of credit card fraud are unusual activity in the merchant account. When the processor detects any unusual activity in your account they will not ask any questions, but first freeze your funds and close your account.

In this scheme of “Shoot First Apologize Later” plan, there will be some innocent victims who would have unknowingly done something which results in the shutting down of their account.

The remaining portion of the article will explain about the activities which will result in the closure of your merchant account. The article will also explain some actions to prevent it.

Unusual processing activity in your account

This is the main reason why innocent businesses become the victims of account closure. Unfortunately, unusual activity is not properly defined. This problem can be overcome by a little common sense and caution while operating your merchant accounts.

High Level of Chargeback’s in your account – Lost or Won

Without regard to whether you have lost or won a chargeback, a high level of chargeback’s in a short time will cause your processor to terminate your account. It is very important to find ways to limit the level of chargeback’s in your account and also correct the issues which are bringing in too many chargeback’s for your business.

Selling of Products or providing service which is not listed in the service agreement signed by the merchant provider and the merchant

If your merchant account processor finds out that your company is selling goods or providing services which are significantly dissimilar than the ones given in your merchant agreement, then your merchant account will be terminated immediately.

Processing other people’s or business’, transactions

Factoring of merchant accounts happens when you process another individual’s pr business transactions with your merchant account. Merchants resort to this method to reach their monthly minimum target. If a merchant processor or provider finds out that you are factoring your merchant account then your merchant account will be terminated immediately and you will face criminal charges.

“Unusually high average ticket”

Processing of a transaction which is abnormally large for your business and merchant account can lead to the closure of your account and also the freezing of your funds.

“Unusually High Processing Volume”

Similar to exceptionally large tickets, abnormally high volume of processing will also lead to doubt and the closure of your merchant account. Processors expect you to limit your volumes to the number stated in your agreement.

If your account was closed due to a naive mistake, you should learn your lesson and move on to open another account with another processor.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.