In many instances, chargebacks eventually surpass the 100 per month limit and the signers find their MIDs shut down by Visa/Mastercard. The ramifications are significant as the signers’ credit is harmed and possibly left with unintended tax consequences. Furthermore, depending on the circumstances of the MID shutdown, the signers’ might find themselves listed on MATCH, a blacklist created by Visa.
“The practice of acquiring and load balancing merchant accounts via ‘signers’ to avoid detection from regulators is ‘outright bank fraud,'” opines a white-collar criminal defense attorney who asked not to be named in this article.
Jeremy Johnson, a notorious free trial scammer, was recently prosecuted for submitting false information to banks to acquire MIDs to load balance transactions at iWorks. In Johnson’s case, he was forced to forfeit all of his assets, including hundreds of millions of dollars, his home, car collection, and business. Johnson is now serving an 11+ year prison sentence.
