Processors offering merchant accounts look at the reputation of your company within the respective industry when reviewing your application for credit and debit card acceptance or ACH payments. Underwriting can decline an application simply from a merchant’spoor reputation online. The bank will look at a Collection Agencies responses and how they resolve consumer complaints made to the Consumer Financial Protection Bureau (http://www.consumerfinance.gov/) and the Better Business Bureau (https://www.bbb.org/),and whether those responses or were made in a timely manner and if the number and nature of the complaints are reasonable given the size and nature of the merchant.
Why the bleak outlook when Collection agencies are viewed as important business pillars to most organizations since they deliver a service, they are not able to provide on their own without considerable cost and manpower. As customers would ultimately choose to pay off past due financial obligations via a credit card or electronic check, acquiring a merchant account is vital.
Unfortunately, the actions of a small percentage of collection agencies across the country tarnish the reputation of even the agencies working honestly, fairly and within all regulations.
In addition to negative public perception, the industry is highly regulated by governmental forces such as the FDCPA and CFPB; enforcing Agencies to be abreast of all changes and remaining compliant. This additional factor also makes opening a debt collection merchant account challenging.