Remotely created checks may be banned soon because of high cases of fraud
The Federal Trade Commission wants to ban some payment methods that are being used by legitimate telemarketers as well as fraudsters. The FTC is doing so because of high rates of fraud involving remotely created checks. This will hurt some merchant processors as it will greatly reduce a significant source of transactions for them.
What are Remotely Created Checks?
When a customer gives a telemarketer(or bill payment service) their check and banking information over the phone, the telemarketer forwards that information electronically to their check processor. The check processor then prints out a paper check with the customers information and clears it through the banking system as a normal check does. This greatly reduces the time it takes for a customer to mail a paper check to the telemarketer or the bill payment service and makes payments faster.
The above process makes it easier, faster and a lot more secure for customers as their check never gets in the mail where it can get lost or stolen. But, this only works securely if the telemarketer is not a fraudster! Â This is what the FTC is trying to prevent. Fraudsters are posing as legitimate telemarketing firms and getting check and banking information from unsuspecting customers and then generating checks to fill their pockets.
You can read more about it here at the Digital Transactions website.
For more information on credit cards or any related processing services, Access Payment Systems will gladly help to educate your business or give advice on the current structure you are using. Contact Us today.
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