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Merchant Processing Firm Collusion: A Hidden Threat to Fair Commerce

In the complex world of merchant processing, a new and insidious form of fraud has emerged: merchant processing firm collusion. Merchant processing firm collusion occurs when two or more entities in the payment processing chain conspire to manipulate the system for their own gain. This can involve payment processors, merchants, and even customers working together to defraud legitimate businesses or exploit vulnerabilities in the payment ecosystem.

Common Forms of Collusion

There are several kinds of collusion, but the most common include:

  • Price Fixing: Processing firms may secretly agree to set inflated fees or rates, limiting competition and forcing merchants to pay more for essential services.
  • Market Division: Colluding firms might divide geographical areas or merchant types among themselves, reducing competition and limiting merchants' options.
  • Bid Rigging: In the bidding process for merchant accounts, firms may coordinate their bids to ensure a predetermined winner, often at inflated prices.
  • Fake Transaction Schemes: Some firms collaborate with fraudulent merchants to process a high volume of fake transactions, generating illicit profits through processing fees.

The consequences of merchant processing firm collusion can be severe. Such consequences may include:

  • Increased operational costs for legitimate merchants.
  • Reduced choice and flexibility in payment processing options.
  • Potential involvement in fraudulent schemes without knowledge.
  • Damage to reputation and customer trust.

Legal Implications for Merchant Processing Firm Collusion

Collusion in merchant processing is not just unethical; it's illegal. Firms engaged in these practices may face severe penalties, including hefty fines and criminal charges. As seasoned merchant processing litigators, the Sigal Law Group has witnessed firsthand the devastating impact this practice can have on businesses and consumers alike.

If you suspect your business has been affected by merchant processing firm collusion, it's crucial to act quickly. Together, we can:

  • Conduct a thorough investigation of suspicious activities.
  • Gather expert analysis of processing agreements and fee structures.
  • Create a strategic argument to pursue litigation against colluding firms.
  • Recover damages and lost profits.

Don't let your business fall victim to these deceptive practices. With Sigal Law Group's help, your interests will remain protected. Contact our offices today for a free consultation.

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