Jun 19, 2014

New Obama Policy Could Affect Your Debt Collection Agency Merchant Account

The Association of Credit and Collection Professionals (ACA International) released a statement to combat criticism of a proposed bill by the Obama administration to let private organizations collect rightfully owed debts on behalf of the Internal Revenue Service.  ACA International President, Leslie Bender, refuted criticism with a statement highlighting the benefits of such a law and a history of the federal government using private companies to collect debts.

The report claims that the perception of debt collection agencies as dishonest and harassing organizations is false. “It is a myth that responsible debt collectors act in disregard of consumer rights. Portraying the action of a few as efforts of an entire industry creates a woefully inaccurate picture of reality.” She emphasis that third-party debt collection agency merchant accounts remain open because they recover tens of billions of dollars to sustain America’s credit-based economy.

ACA international, like many other debt collection agency merchant account holders, want to stop debt collection agencies from engaging in dishonest and harassment like tactics. Bender then purports that consumer debt collection agencies are more trustworthy than many other agencies because of heavy oversight.

“Consumer debt collection is among the heaviest regulated activities in America by federal, state and local laws and regulations. The industry is engaged with policymakers to modernize laws and rules for collecting rightfully owed debts,” said Bender

She notes that The Consumer Financial Protection Bureau is charged to oversee debt collection agency activity, which means that they will ensure these agencies stay customer focused, and work under consumer financial laws. .

The President of ACA International says consumer or legislative fears that private companies collecting debt on behalf of the public sector has been done before and has failed. She cites the 2006 IRS National Taxpayer Advocate Annual Report, which monitored the success of private organizations that collected on behalf of the government.

“Allegations that the use of private debt collectors in the public sector is a failed experiment are not founded in fact. This report also indicated that of the nearly 19,000 cases assigned to private collectors, only 31 complaints were reported (0.001% of all contacts) and the majority of the complaints dealt with questions about IRS procedures for authenticating taxpayer identity intended to protect privacy.”

ACA International supports legislation that requires the U.S. Department of the Treasury to contract with responsible third-party debt collection services.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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