INCOMING: FBI probing negative option bank fraud schemes


According to sources, the FBI is actively investigating several negative option billing schemes and the vendors that are helping faciliate them.

The negative-option bank fraud diet and beauty schemes work like this:

Step 1:  An advertiser (merchant) that seeks to promote a product signs up for a CRM that has the capabilities to load balance the transactions.

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Step 2:  Thereafter, the advertiser connects with a website designer that knows how to put together a bank page.   The bank page is the page that the advertiser presents to banks to acquire the merchant accounts, aka MIDs, to handle the transactions.

Bank pages are compliant websites that are designed to acquire the merchant processing (MIDs) to process credit card transctions.

Step 3:  With the assitance of the CRM provider, whom makes intros to MID providers and/or provides MIDs themselves, the advertiser registers dozens of shell companies to acquire MIDs for the sole purpose of using the CRM to load balance the transactions to stay beneath the Visa/Mastercard fraud thresholds of 100 or less chargebacks per month.