CDNN sports hit by CITI Bank

[lawrnk]

Response from Citi. I wonder why the NRA has not spoken up yet?

Thank you for your message.

Citi Merchant Services and First Data do process firearms transactions. Our policy restrictions address only the sale of firearms in a non face-to-face environment. Non face-to-face transactions occur when a cardholder is not present in front of a merchant and includes mail order and online purchases. It is our policy not to service merchants that make non face-to-face sales in a number of industries, including firearms.

It is not the policy of Citi Merchant Services or First Data to refuse to process transactions from duly licensed merchants that sell firearms in face-to-face transactions at the point of sale.

[lrb111]

That should be interesting. I haven't seen it noted yet, but CDNN has no face to face sales of any kind. They are mail order only for everything they sell. Citi had to have known this going in...

I just emailed this to the email address in FirstData's response. It will be interesting to see if I get a response. If I do, I'll bet a dollar to a donut that no industries will be disclosed.

This was posted on an Internet forum and purports to set out Citi Merchant Services and First Data Corp.’s policies regarding non-face-to-face transactions. This email is in response to your instructions to “Please direct any questions to Questions@firstdata.com.�

Please identify the other industries subject to your policy, or Citi Merchant Services’ policy, to limit sales to those made face-to-face, as set out in your response quoted below. This information will be used to verify or refute this contention so that accurate information can be disseminated on this issue.

Sincerely,

Charles L. Cotton
Cotton-Farrell, P.C.
1010 Lamar, Suite 860
Houston, TX 77002

Thank you for your message. The posting at http://www.nssf.org regarding Citi Merchant Services and First Data Corp. is inaccurate. Further, while we generally do not comment on individual merchant customers, we would like to briefly address the 12/26 letter posted on the web site. Regretfully, that letter did a less than satisfactory job of expressing applicable policies. Those policies are more properly detailed below.

Citi Merchant Services and First Data do process firearms transactions. Our policy restrictions address only the sale of firearms in a non face-to-face environment. Non face-to-face transactions occur when a cardholder is not present in front of a merchant and includes mail order and online purchases. It is our policy not to service merchants that make non face-to-face sales in a number of industries, including firearms.

It is not the policy of Citi Merchant Services or First Data to refuse to process transactions from duly licensed merchants that sell firearms in face-to-face transactions at the point of sale.

Please direct any questions to Questions@firstdata.com.

The posting also incorrectly states that Robert Tenenbaum is the supervisor when, in fact, he is not.

[nitrogen]

Executive Summary: When first data is talking about non-face to face sales, they mean sales where the card is not physically present in the merchants hands. They arent referring to federal legal terms when dealing with the GCA.

As someone that's worked with credit card processors in the past, I might be able to shed some light on this for you.

First, a quick primer on how the system works, for those of you that don't know.
First Data/Citibank as a card processor is basically the middleman between the merchant, and the "card", i.e. Visa, Mastercard, Amex, etc.
Each "card" charges a fee for use, and so does the processor. The processor's fee varies based upon
the method used to charge the card. Most processors will provide card swiping equipment, and other equipment to help the merchant get their business running. Their fees pay for the equipment, and their services. They basically act like a "clearing house" for credit card transactions.

Now, the different types of card transactions:
There's "Type 1" transactions, or "Card Present" transactions. Basically, this means what it says: the card is present in the merchant's hands. There are subcategories, (Qualified, midqual, and nonqualified, but each processor has different definitions for what constitutes each type. Basically, it's based on risk of fraud.)

Then, there's Type 4 or "Card Not Present" transactions. These include internet, mail order, etc, where you have to give your card number, exp date, and the little code on the back of your card.

Some processors also ban other high-fraud "card not present" businesses, like online gambling, online liquor sales, online pornography, etc.

I know that the BATFE leaned on card processors to prohibit CNP transactions for tobbaco sales a while ago, so that's one good example.

[WildBill]

A couple months ago I tried to use my credit card [not Citi] to wire some money by Western Union. My bank called me and told me that they denied the charge because there is too much risk of fraud when wiring money.

[cbr600]

Executive Summary: When first data is talking about non-face to face sales, they mean sales where the card is not physically present in the merchants hands.

Right. Like Amazon.com and other online stores.

[Turfspanker]

Response from Citi. I wonder why the NRA has not spoken up yet?
.

I received my first NRA Alert email this week -

NRA-ILA Investigating Citigroup Issues: In late December, 2007, a large and well-known firearms dealer was informed by a company called First Data -- which operates as Citi Merchant Services under license from Citigroup, Inc. -- that it would no longer handle the dealer's credit card processing business.
http://www.nraila.org/Legislation/Feder ... px?id=3358
http://www.nssf.org/news/fromBP.cfm?BPseq=704

Thanks NRA!

[KBCraig]

A couple months ago I tried to use my credit card [not Citi] to wire some money by Western Union. My bank called me and told me that they denied the charge because there is too much risk of fraud when wiring money.

First Data also owns Western Union Financial Services.

Ain't it a small world?

[Mac Truck]

I just sent First Data a quaint little email asking them why they prefer the feel of 231 year old quill paper to the soft and squeezable essence of Charmin upon their supple, Stalinesque buttox... I signed the email with my real name, phone number, email, and address as well. Molon Labe!