Terminated Merchant File (TMF) Match List – One List You DO NOT Want To Be On!
June 25, 2009 by Matthew Hunt
I recently had a client who we submitted an application into the merchant account underwriters and the application came back being on the dreadful “TMF Match List“. Now this has only happened to maybe half dozen of my clients (out of about 1000 applications), and I felt it warranted a blog post on the subject matter to help Merchant understand what the LIST is how to try to prevent ending up on the ‘TMF Match List‘.
You may be asking yourself “What is the TMF Match List“?
When you apply for a merchant account, the underwriters will check to see if you are on the Terminated Merchant File (TMF). If you’re on it, this means that another payment processor has terminated a merchant account with you, and sends up a red flag to all the other payment processors that you’re a credit risk. Once you are on this list nobody can get you approved from any of the merchant account providers until you are removed.
How do you get on the TMF Match List?
The bad news is… is it’s not difficult to end up on this list and it can happen to good, honest hard working Merchants. Not enough merchant processors take the time to educate merchants about the “Do’s & Do n0t’s” merchant account services. And when they do, its in some legal type document in tiny print that even the smartest bankcard lawyers would have difficult time digesting it all.
All it takes is one accounting error or technical mistake or even a little dispute over billing practices and your business is in jeopardy.
So how do you get on the Match File? The most common ways to violate you merchant agreement includes:
- Credit card fraud – If your fraud detection controls aren’t strong enough you could end up with too many chargebacks.
- Friendly fraud – This is when a consumer disputes a legitimate charge such as from an adult website, hence why adult sites are consider ‘high-risk’. Card processors do not like high chargeback businesses.
- Factoring – Factoring is when a merchant deposits transactions for sales generated by another business. You must never do this, you are approved for your business and your business only. Do not let a friend convince you of using your debit machine for the weekend or whatever. This a for sure way to get your merchant account terminated. People are usually caught because the billing on consumers credit card statements shows you info, yet they purchase from your friends business and now that they do not recognize the business info they issue a dispute causing chargebacks, etc.
- Not delivering products or misrepresenting products or services.
- Owing money to the merchant account processor
- Refunding money to your own credit card – you think they can’t tell your credit card was refunded on your merchant account.
- Running your own credit card on your merchant account – big no-no.
- Basically excessive chargebacks – card processors do not like to see chargebacks above 1%
One of the fastest ways to get on the Match list is to close your merchant account and not pay your last statement. It’s a simple oversight with costly consequences. Even a matter of a couple of dollars can land you on the dreaded list. Fortunately, this is one of the easiest fixes – just pay your remaining bill/fees.
Tips for staying off the TMF list:
- Don’t go over your officially authorized maximum sales without permission from your merchant processor. Many merchants are unaware that when you applied and put down your expected monthly sales volume that creates your profile of sales limits. You see merchant account are seen kinda like a ’short term loan’ and you are approved for a certain amount. Credit Card Processors do not like it when you exceeding those amounts with prior notice or growing your business organically over time (kinda like improving your credit limits through years of good credit). The worse thing you can do to a merchant account is slam it with ton of sales – this causing ‘huge’ RED FLAG and with cause your funds to held until the securities department decides it safe to release your funds.
- Make sure you make easy for your customers to resolve any issues they may have had with your products and/or services. Provide your customers with up-to-date information about how and when you will debit funds from their accounts. Give them easy access to contact methods for them to reach you with any of their questions, concerns or complaints. Respond to all inquires in a timely fashion. If you don’t do this you are just asking for a flood of chargebacks.
- List your customer support phone number on your customers’ monthly statements. If they don’t recognize your debit they should call you first before hastily-and mistakenly-disputing the charge.
- Provide excellent customer service and stay in touch with your customers. Send emails, call them to confirm higher-than-normal charges or to solicit customer feedback, and send newsletters. The more they know you the better the more they will feel comfortable with and trust you.
- Monitor transactions closely with a transaction management system, so that you can protect your business from an expensive interruption of service.
If you find out that you’re on the TMF list, there is hope-but it will take some work. Sometimes bad things happen to good honest Merchants, but don’t lose hope, it is possible to get off the ‘Match List’…now that being said…if you committed fraud, you probably won’t ever get off the list.
As soon as you find out that you’re on the TMF, call the merchant account company that placed you on the list. Prep yourself to be speaking to many different departments before you will reach the ‘right person’. Once you have reach the ‘right’ person keep your cool (no matter how frustrated you are) The ‘risk department’ is NOT customer service and they don’t deal well with angry Merchants, nor do they have to. Think of them more like a collection agency only this collection agency is trying to get their money back from you they usually have it already. If they have your money they can legally hold up to 11 months in trust before they have to release your funds back to you. This enables them to protect themselves from any chargebacks. I have seen this cripple businesses before. Please be patience, nice and do exactly what they ask. Some people are going to not be nice anyways, but you were for warned.
If you believe your business or name was mistakenly added to the Match file, you must work with the acquirer that added the listing to the file. Only the company that placed you on the list is authorized to request a change or deletion of the information.
If you were placed on the match file for a high chargeback ratio, time is usually the only thing that will get you off the list. Your card processor needs to know that it isn’t going to get stuck with unpaid bills resulting from the merchant’s former customers’ chargebacks. They sometimes will request a deposit or rolling reserve if you do not already have one.
It can take several weeks to get off the match file in many cases. If after a few weeks you don’t make any progress, you may need to hire a lawyer. If you need legal assistance in getting of the Match file, seek a lawyer with experience in bankcard law.
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