Third-party debt collection is a multi-billion-dollar industry. In 2016 alone, the amount of debt collected has resulted in $67.6 billion return to creditors.* This segment of debt collection industry employs approximately 130,000 jobs with another 89,000 jobs created by the industry itself indirectly. These companies collect much of the debts by accepting credit and debit cards. Unfortunately, a major hurdle was thrown its way named Operation Choke Point.
Operation Choke Point was a 2013 initiative of the United States Department of Justice, which would investigate banks in the United States and the business they do with firearm dealers, payday lenders, and other companies believed to be at higher risk for fraud and money laundering, which included debt collection companies. This operation was officially ended in August 17, 2017 with the announcement by Justice Department to end it. Fortunately, that draconian decision was ended. However, the unfortunate result of Operation Choke Point was that a number of credit card processors stopped processing credit and debit card transactions for debt collection companies. This resulted in a panic among these merchants. They were faced with the grim prospect of losing business and even going out of business if they could no longer accept card payments. The mere then-new classification as high risk forced them to sign up with processors who specialize in underwriting high-risk merchant accounts, which charged them much higher fees, gouging often up to 7-10% over and above Interchange, the base cost processors collect on behalf of issuing banks. To put this in perspective, if the overall cost to these merchants was 4%, inclusive of Interchange, the extra 3-6% on each $100,000 in monthly processing volume means paying an extra $3,000-$6,000 per month.
EFT Direct opposes such predatory practices. And we stand side by side with ACA International in our opposition to such unfair and harmful decisions that affect so many lives so negatively. We can offer processing at lower cost. If you are not satisfied with the current monthly fees, or if you simply would like a new quote, please consider contacting us. For a confidential assessment, please contact us here.