Thursday, August 25, 2011

Terminated Merchant File, TMF, Match List. How to get on it and what to do if you are.

There are some lists you want to be on like a VIP list, a guest list, or a Christmas card list. But the TMF is one list that as an online merchant you don’t want to be on.


I speak with Merchants all the time who have been placed on the list, and usually I am able to get the a merchant account, offshore, as long as they can provide a letter the shows why they ended up on the list, and what steps they are taking to ensure they don’t run into the same problem again. The banks are I work with are open to this and understand that not everyone on the list is bad. So, being on this list is not a death sentence, but it can definitely suck. If you are on the list, and you need help, contact me and let’s evaluate the situation and let me help with solutions.


Getting back to the list, let’s start with the basics. What exactly is the TMF or Match List? The Terminated Merchants File (TMF) or match file is basically a list of merchants that have had their merchant accounts closed down by their processing bank on negative terms. If you are placed on the match file, you, any partner of your business, your business itself, and possibly anyone at your address can not sign up for a merchant account with a US based processing bank. Processing companies take the match file very seriously.


When you apply for a merchant account, the bank or processor will check to see if you are on the Terminated Merchant File (TMF). If you’re on it then this sends up a red flag to banks that you’re a credit risk. The chances are slim to none of getting approved once your name hits the list. Getting on the TMF list is the equivalent of getting blacklisted. However, as nice as it would be to say that that every business that is placed on a terminated merchants file deserves it. It’s absolutely not the case.

Now, how can someone get on this list you ask….well unfortunately, its not that difficult, the challenge is getting OFF the list, even if you didn’t deserve to be on it. Here are some of the most common ways of ending up on the list.

• Credit Card Fraud. If don’t have strong enough fraud control and detections, you can end up with way too many chargebacks.
• Friendly fraud. This is when a consumer disputes a legitimate charge such as from an adult website.
• Factoring. Factoring is when a merchant deposits transactions for sales generated by another business.
• Excessive chargebacks-approximately 1-2% of sales.
• Deception Marketing and Fraud. Types of fraud include not delivering products or misrepresenting products or services.
• Violating the terms of your merchant agreement
• Owing money to a bank or processor

Also, keep in mind that because of your merchant account provider, you could wind up on the TMF if your provider counts chargebacks in the month it comes in instead of the month the original transaction occurred. If you do fewer sales in the month the chargeback is processed, your chargeback percentage could skyrocket, and you end up on the list.

Regarding the last point above, owing money to the bank or processor – one of the easiest way to get on the list is to close your contract with a merchant provider and not pay your final bill. This is basically a guarantee you will end up on the list. Your final bill includes any processing costs that you owe, but also includes any monthly, yearly, or termination fees that were specified on your merchant contract. You are also liable for 6 months past the settlement date of the final transaction that was processed on your merchant account. The settlement date is defined as the date that the service or merchandise was fully delivered to and accepted by the customer.

How to get off the list, like I mentioned above is very challenging. Basically, the only company in the world that can get you off the TMF, is the company that put you on it. It does not matter who you talk to, what they promise, who they are, or anything else, it always comes down to the company that put you on it. Businesses usually learn that they are on the TMF when they try to open a merchant account with another company.

The company that puts a merchant on the TMF is the processor that is taking on the risk of allowing the business to process with them. These are often the back end companies that you may have never had any personal contact with. Merchant Service Providers and resellers are not normally the companies that can put a merchant on the TMF, unless they are taking on the risk of your credit card processing, so calling them may have no effect, but regardless, the company you signed up your merchant account with is who you should contact first. As soon as you find out that you’re on the TMF, call your merchant account provider-or the company that placed you on the list. Prepare to work to speak to many departments until you get in touch with the right person. You might end up being referred to the processing bank.
Depending on why you are on the TMF, it can be easy to impossible to get off the TMF. If you are on it for committing fraud yourself through your own merchant account, don’t count on ever getting off. Processors do not like fraud in any way, and if you as a business owner were the cause of it, they will not ever want to provide services to you again.

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 a business was placed on the match file for a high chargeback ratio, time is normally the only thing that will get the business off. The processor needs to know that they aren’t going to get stuck with any unanswered bills from the merchant’s former customer’s Chargebacks.

If you didn’t pay your final bill, it may just be a matter of making good on your debt with your former processor. I have seen this as low as a few dollars, and the merchant was removed about a week after they made payment.

Unfortunately the majority of the time it is not that simple to get off the match file. It normally takes several weeks to get off the match file. Sometimes it takes negotiations to get charges cleared up, or fees removed. At this point every case is unique. If after a few weeks you are not making any headway, you may need to consult a lawyer. Processors normally use a system called arbitration to avoid taking individual cases to court. It is cheaper than going to a court, and the results are often better for both parties.

Here are some tips for staying off the list:

• Don’t go over your processing limit, if you think you are going to speak to the processor first.
• Don’t use any deceptive billing, be upfront with customers about charges and when the charges occur. Always provide easy access to customer service.
• Have the customer service number on the credit card descriptor. You want them to contact you before the bank.
• Always provide top notch customer service and make sure there are open lines of communication.
• Monitor your transaction closely, if something appears out of the norm then investigate immediately.

If you have any questions about this posting, or how you can get processing even while being on the TMF list, please do not hesitate to contact me.

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