TMF MATCH List or Terminated Merchant File (TMF) List
May 19, 2008
Posted by Michael Brooks in Chargebacks, Payment Innovations & Technologies, Risk and Fraud Management
Some lists you want to be on-like the VIP list. But the TMF is one list you don’t want to be on. We’ll talk about what this means for your business, how to avoid getting on the TMF list and what to do if you end up on it.
What is the TMF Match List?
When you apply for a merchant account, the bank will check to see if you are on the Terminated Merchant File (TMF). If you’re on it, this means that another bank has terminated a merchant account with you, and 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.
How do you get on the TMF List?
Unfortunately, it’s not that difficult to get on the list but it is a challenge to get removed-even if you didn’t deserve to get on the list in the first place.
All it takes is one accounting mistake (yes, even on the bank’s end), technical glitch or dispute over billing practices and your business is in jeopardy.
So how do you get on the Match File? The most common ways include:
- Credit card fraud. If your fraud detection controls aren’t strong enough you could end up with 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.
- Fraud. Types of fraud include not delivering products or misrepresenting products or services.
- Violating the merchant agreement
- Owing money to a bank or processor
One of the fastest ways to get on the Match list is to close your merchant account and not pay your last statement. It’s a simple oversight with costly consequences. Even a matter of a couple of dollars can land you on the dreaded list. Fortunately, this is one of the easiest fixes. Read on for tips on getting off the TMF list.
If you have an unscrupulous 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.
How to get off the TMF list
Bad things happen to good people all the time-but that doesn’t mean you can’t do anything about it. If you find out that you’re on the TMF list, there is hope-but it will take some work. If you’re thinking that you can get a new merchant account by changing your business name or having a spouse or relative sign up for you, be weary; banks are savvy to this scheme. Banks have ways of finding you out through social security numbers, ISP addresses, and public records.
Depending on why you’re on the TMF, you will have an easier-or a harder-time getting off of it. If you committed fraud, you probably won’t ever get off the list.
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.
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 your acquirer recognizes that the listing was in error, they must request the file correction immediately. Examples of errors include termination for reasons that don’t warrant a public listing such as inactivity.
To request a change or deletion, the listing bank submits its request to MasterCard International in Purchase New York. The designated individual at MasterCard will review the merchant’s explanation and listing bank’s justification for change or removal from the listing. MasterCard International reserves the right to deny the request. The listing bank must justify its reason for the deletion.
Losing your merchant account and not being able to process credit cards is stressful but try to remain calm and act courteously to every person you talk to, no matter how upset or frustrated you are. Once you reach someone that knows something about your situation-probably in the risk department-he or she should be able to tell you why you are on the match file and explain your options to get off the file. Get a direct phone number for someone that you can correspond with about the situation in the future.
If you were placed on the match file for a high chargeback ratio, time is usually the only thing that will get you off the list. Your bank needs to know that it isn’t going to get stuck with unpaid bills resulting from the merchant’s former customers’ chargebacks.
If you didn’t pay your final bill, you may only need to pay off your debt with your former processor. You could be re-instated after a week or so after you make payment.
On the other hand, you could face more opposition. It can take several weeks to get off the match file in many cases. Sometimes you will have to negotiate to get charges resolved or fees removed. If after a few weeks you don’t make any progress, you may need to hire a lawyer.
Processors often use arbitration to avoid taking individual cases to court. It’s cheaper than going to a court and the results are often better for both parties. If you need legal assistance in getting of the Match file, seek a lawyer with experience in bankcard law.
Read more about how to stay off the TMF MATCH List.
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When you have quit a charge card service provider, as I have, because of fraudulent practices of the processor, how do you avoid being placed on the TMF list due to the processor’s retaliation?
David Larson
A bank will terminate a merchant account and place the merchant on the MATCH/TMF when the account has problems that create a high risk of loss to the bank. These problems can include excessive chargebacks, violation of the merchant agreement and rules, fraud, money laundering, and excessive counterfeit cards. It is best to leave each provider on good terms. This does not mean you can not get a merchant account. The best way to avoid being put on Match/TMF is to make amends with your provious provider.
I have just been advised that my business will be listed on the match file because of too many chargebacks by barclays. Every transaction on my website was fully authenticated by verified by visa and secure by mastercard howver i was still getting chargeback letters from the bank for trasnactions.
A years after we commenced business barclays wrote to me saying that they know that we have the 3D secure but cannot do business with us as there is 70% fradu on our website event when all trasnactions are fully authenticated. I was very confused.
They have advised that my business would be blacklisted on the match file and my merchant account cancelled.
I see it as quite unfair as I particularly wrote to barclays requesting information on a lot transaction which were fully authenticated but suspicious and they only advised that I go to the police if i suspected anything but as far as they are concerned all my transaction were authenticated and are approved.
How do I fight against barclays on this. It will be extremely diffiult for me to trade or get another platform.
I get the blame whatever I do.
What type of product do you sell? There are ways of preventing chargebacks based on what is sent out to your customer when a purchase is made, what types of follow calls are made etc…
What can I do to fight a company that is threating to put me on the “match list”?
What if the merchant company that put u on the match list, made the mistake of putting the wrong phone # to appear on customers credit card statments, n for that reason I was hit with many chargebacks at once.
Brian,
Frequently I hear of merchants being placed on the match list based on incorrect information on the discriptor. You typically get a letter in the mail to notify you that a charge back has occured. If you contact your customer and resolve each customer issue you can avoid getting dinged for chargebacks. I would contact your merchant company and speak to someone who is in charge posibly even the owner. And get your name removed from the list.
My blood, sweat, and tears business of 6 years (sole proprietorship) has just now failed, and I will soon be filing personal bankruptcy. Unfortunately, while my bank merchant account is still open at this moment, I’m getting a large number of chargebacks (too many I am quite sure) for failing to process returns and honor warranties. Also, funds will soon cease being available to offset any chargebacks. I suppose the bottom line is that I am destined to find myself on the TM list. Is that list virtually “forever?” Is there any hope of salvaging myself at some future point, or will I be a financial leper? What do people do as a practical matter who find themselves in such a predicament but who hope to eventually open another business one day? I suppose starting a corporation and enlisting a trusted and credit-worthy friend or family member to be the principal may be the only viable way? Any thoughts?
Without telling me my processor witheld $14,000 from me and caused major problems. They refused to return phone calls for weeks and this action caused a snowball effect. We weren’t able to ship many products because there was only so much money we could borrow and this caused alot of chargebacks. They terminated our account and put us on the tmf. They said they terminated us because of excessive chargebacks and yet they are the ones that caused the chargebacks.
Please help. This business supports a family of 5 and we need to process credit cards.
Tom,
There are ways to resolve processor issues and have your name removed from the TMF list. The key to staying off the list is making sure you are staying on top of where your chargebacks are at all times. I suggest you attempt to resolve this issue with your previous processor. If you can not resolve the issue you always have the option to search for an offshore account.
My merchant account was terminated. My charge back rate was sitting at 26% due to a CPA network that I paid to send traffic to my website. So basically paid them to shut down my business. How do I go about getting off the TMF.I owe them no money just my charge back rate was high. I really a little help on this one thanks
Jared, this is becoming a common occurrence in the affiliate marketing arena. A bad affiliate network, or even a good one with bad sub affiliates, can not only cost you a tremendous amount in marketing costs, it also can cost you your reputation within the card associations and your processor. You have become a victim of a very real and scary industry problem. Here is some background of what might have happened;
1) An advertiser marketed his products online via trial offer with an affiliate network
You pay the affiliate network for what you think are real sales and they pay the data thief.
2) Customers accepted his trial offer by signing up with a credit card
3) The advertiser ran into cash flow issues so he sold the customer’s credit card information to a data broker so that the data broker could rent the data to various companies for the purpose of card on file sales.
4) One or many sales floors rent the data from the data broker and call the card holders and sell them products. The sales floor sees a higher call to sale ratio if all they have to say is “would you like to buy this using your credit card ending in 9830?”
5) One or many of the sales floors or the data brokers themselves, have an employee or employees that steel the cardholder’s data.
6) The data thief becomes a sub affiliate of an affiliate network.
7) The data thief signs up the cardholders for your, and other, trial offers through an affiliate network.
9) The cardholder disputes the charges and you are responsible for the fees and losses of the merchant account. You are also looked at as a scammer and placed on the industry’s MATCH File.
10) In many cases, not necessarily yours, Jared, you get fed up with the industry and sell the data you have to a data broker and cut your losses.
This is an obviously damaging cycle and is happing everyday in this space. We have met the changes of this cycle by indentifying bad traffic before it’s approved and in other cases immediately after. In order to play in the affiliate space you need to be prepared with the best systems in place. That is the reason we have developed and have been successful with our TransGrade CRM. It’s designed to keep your conversions high with quality traffic and manage your customers in a responsible manner.
You went out to do good business and suffered at the hands of reckless fraudsters. It’s not your fault, albeit to the card associations, you might as well be the fraudster yourself.
Your question is; how do I get off the match list. With a 26% chargeback ratio it’s unlikely that you will get off any time soon. You see, if a bank puts you on the MATCH list they are the only ones that can take you off. If a bank puts you on the list then takes you off, that bank is responsible for any fees and negative actions associated with your activity for the next 5 years. That’s just some of the politics of the industry.
That does not mean you don’t have options. There are processors that understand this type of issue and will work with you. It sometimes costs a little more but the alternative of not accepting credit cards online is not really an option.
If you are planning to get back into this arena with your eyes open to this type of problem, then the first thing you should do is call our office and ask to speak with me. We can provide you with a system that protects you against these and other type if pitfalls with our extensive experience and technology. We also have relationships with processors that will accept your business, even if you are on the MATCH list, just because you are working with us.
I know this must have been a difficult and expensive lesson. I can tell you that the most successful people in this industry have similar experiences and overcome them. I’m sure you will be able to also.
We’re here to help.