If you have a business that is considered high risk, you have even more reason to be aware of a disturbing Department of Justice program. Operational since 2013, it has been named Operation Choke Point; this program allows unelated bureaucrats to target law-abiding individuals and/or industries.
The intention of this program was to battle fraud and money laundering. However, it did not take long for the program’s powers to be abused by unelected bureaucrats. At the beginning of March 2015, the US Consumer Coalition revealed the unjustified attacks that were made on Global Hookah Distributors.
This North Carolina tobacco distributor was cut off from the bank it had done business with for 14 years (Bank of America) and its payment processor (EFT Network). All of this was done regardless of the fact that the company had never been accused of committing a crime.
Likewise, a Wisconsin firearms and ammunition store, Hawkins Guns, was dropped by its local credit union. Why? Simply because the credit union did not want to provide services for a business that dealt with guns.
There are four criteria that the FDIC uses to classify a business as being high-risk. These criteria include: internet or telephone sales, difficult consumer verification of merchant identity or legitimacy, uncertain quality of goods and services or lack of consumer familiarity with the merchant. The problem with the cases of Global Hookah Distributors and Hawkins Guns is that neither of them seem to fit any of this criteria, and the FDIC has failed to identify why they feel that they do.
The main issue with this program is the demonstration of what can happen when regulatory agencies receive too much power. The other danger is that unelected bureaucrats can pursue law-abiding individuals and industries that are simply viewed unfavorably. This programs unrestricted power needs to be reined in before more innocent businesses and/or their owners are targeted.
Events like this can confirm a business owner’s fear of failing to obtain or losing services already obtained from a traditional financial system. Fortunately, there are many options available online today that help businesses labeled as “high risk” to gain merchant funding and payment processing solutions.
For example, with 1st American Merchant Funding, you can enjoy high risk merchant account instant approval. It is as simple as submitting a form, receiving your quote and getting your funding. Don’t let outside threats make you worry about being accepted by a traditional funding source or losing the one you already have. 1st American Merchant Funding specializes in working with high risk businesses.
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