Ethics is not Optional.
Certification Would Help, and so will its
Flip Side: Blacklisting Our Industry's
Truly Bad Apples

By: Biff Matthews, President, Cardware International

To its credit, ETA has considered the idea of a careful listing process that could
shine a spotlight on the small, but significant portion of the MLS population
whose deceitful or unethical behavior causes havoc for merchants, financial
losses for ISOs and banks, plus bad press for everyone in the food chain.

Nothing has been implemented yet.  Part of the hesitation is how such a list
can be fairly constructed, and maintained, for the specific purpose of warning
potential customers, or employers. It goes without saying that preventing
inaccuracies, mischief, and, as a recent Greensheet article called it, “adios”
listings, is paramount. 

Lawsuits are always a perceived risk, although there are solid, longstanding
models that diss this perception.  Think Better Business Bureau.  Angie’s List. 
And various sites for physicians that list patients, and their attorneys, who have
demonstrated an affinity for malpractice actions.  

Notably, challenges to information provided on these sites have often been
deflated by first amendment free speech guarantees, and by mechanisms within
the sites that allow response or clarification from the listed party.

I think the best strategy would be two lists.  On one, companies could add an
MLS who has acted improperly.  On the second, a certified MLS would be able to
add companies who have acted unethically.  It is, after all, a 2-way street.  A street
whose signage is well-known, but not always heeded.  (“Read the contract! 
Negotiate carefully.  If you can’t live with the fine print on the document,
don’t sign it!”)

What’s occurred is that, like the merchant agreement, the agreement between
the company and the MLS is lopsided, created to favor the company, and protect
it from liability.  But the chain of liability flows from the association to the bank,
to the ISO, to the MLS and onto the merchant.

Industry leadership – ETA – is the proper arbiter here.  It can easily maintain
the two web-based lists of MLS and companies who have acted fraudulently,
or unethically.

The simplest option, in order to mitigate liability, is to list only the name of the
company or individual, and contact information of the person or company making
the post.  A more robust solution would be to include a summary of the dispute,
and a mechanism for adding comments. In either scenario, there should be
procedures for rebuttal, and for having a name removed.   

Many similar and successful lists exist as workable examples.

As with other lists, abuses will occur, in, this case, by both MLS and ISO. 
Honesty and integrity in the list’s use is every bit as important as the practice
of those attributes in our industry. Yet, those abusing the list must themselves
be listed.  We’ve all heard the stories: a company won’t post a bad MLS because
they want their competitor to hire them, or an MLS posts a company in retaliation
for terminating them with just cause.  Prudent management of postings, along
with procedures for rebuttal or removal will engender credibility. 

Most readers are familiar with the MTF –the merchants terminated file. These
are merchants who’ve been closed for cause.   Banks list merchants whose excess
chargebacks, fraudulent transactions, improper cash advances, non-delivery of
services or excessively restrictive refund policies make them undesirable partners. 

If MC and Visa can maintain a credible list, ETA can as well. To not do so is a
cop-out.  What legitimate purpose does an organization have other than to
advance the standards of its membership?  

We all want to elevate the professionalism of the industry.  To do this, banks
must hold ISOs accountable to hold MLS accountable.  But because Visa and
MC do not hold banks accountable, none of this is happening.  The card
associations’ agenda has just one item – revenue generation.  Their PR says
they want to “protect the brand,” but by not walking the talk, they give tacit
approval to the unscrupulous, and become part of the problem.

Hundreds of honest, ethical, salespeople have completed the ETA training course. 
They deserve to be separated from the 2-3% who cause the problems, and should
be expelled accordingly.  No doubt, they will go elsewhere. The came from shady
sales of used cars or stocks, or sub-prime mortgages, and once exposed will
surely return to Shady Something Else. 

This is not our problem.  All we can do is get them out of here.   If we don’t
manage our reputation, they will.  Responsible self-policing will prevent a lot of loss.    

Biff Matthews is President of Thirteen Inc, the parent company of
CardWare International.  He is one of 12 founding members of the ETA,
serving on its board, advisory board and committees.  (740) 522-2150.

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