Type of Merchant Account Scams

Type of Merchant Account Scams

Last Updated on January 28, 2022 by binkhalid

Online business is associated with a risk of different frauds. Those, who accepts payments in the web, should carefully choose providers of merchants accounts. Scam may lead to severe financial losses and loss of personal information. Let’s get acquainted with the main types.

Merchant Fraud: Hidden-Fees

Some providers both in Europe and in the USA attract clients with low rates. Service seems too good to be a reality, however, new merchants may oversee the trap.

The truth is that hidden fees or charges are quietly imposed. The merchant will realize the situation only when getting the bank statement. The cancellation fees, of course, are going to be too high.

To avoid such a risk one should always ask for a full price list and carefully read a contract. Do not go for a low price, it should be reasonable.

Merchant Fraud: Scam and Identity Theft

Sometimes merchant services look quite legitimate, but the purpose of their work is only to steal your money or personal data. Service seems to be affordable and reliable, so the merchant register in it. Then one of the following happens:

· There is an initial deposit fee that must be paid. After the payment and money laundering the fraudulent provider just disappears.

· After signing up merchant must provide data like numbers of credit cards, bank accounts and other personal information. Then the provider is gone.

Backdoor Merchant Fraud

In this type of Merchant Fraud, the payment gateway is hacked and a third-party access appeared. Such Tool gives away all the personal information, provides money laundering and redirecting of payments.

To avoid all above-mentioned situations, check the merchant services with some security technologies. For example, Covery provides a range of helpful tools for this purpose. Together with covery.ai you can protect your business and prevent all kinds of fraud.

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