Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Advanced payments greater than 1 year (any product or service) | Merchant accepts payment for a product or service that will be delivered, partially or fully, one year or more from the initial payment. This includes merchants that fulfill part of the product or service within a year but the completion of the agreed upon product or service occurs over one year from the initial purchase. For example, the merchant accepts payment upfront for three years of lawn care. Another example, the merchant sells a kit to build a train whereby parts of the kit are shipped over a two year period. Each month the cardholder is charged, and shipped, for parts to build the train but the train requires all parts to be received in order to function. Example # 3, a contractor agrees to build a home that will take 18 months to complete. The agreement calls for the credit card to be charged in 18 equal installments as progress payments toward the completion of the home. |
| Age or legally restricted products/services (not addressed elsewhere), CNP | Merchants that sell products or services not mentioned elsewhere in this document that are either illegal or illegal depending on the customer’s age |
| Alcohol sales, Internet/MOTO (excluding wineries that follow age verification at the time of sale and delivery and business to business & following all Federal & State
laws as well as Card Brand rules) |
Merchant that sell alcohol in a card not present environment are Unqualified/Unacceptable unless the merchant’s sales are business to business/wholesale or
they operate a winery and provide documentation at the time of application that outlines how they validate the age of the purchaser at time of sale and delivery. |
| All adult products and services |
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| Airlines | Merchants that provide scheduled passenger air service. Payments are normally taken far in advance of the flight. This includes both national, regional and charter airlines. This does not include merchants that offer day trips with limited prepayment (for example, day tour over the Grand Canyon). Does include merchants that offer fractional ownership in corporate jets whereby the cardholder is required to prepay for services. |
| Any form of illegal Gambling | Is any type of gambling that is specifically prohibited by state law. |
| Any illegal products/services or providing peripheral support of illegal activity | Any product or service deemed illegal including any product or services that may, in themselves, be legal, but can be used to “aid and abet” illegal activity. For example, merchants that do not accept online gambling transactions but facilitate payments to online gambling websites or merchants that sell products or services or how to books on passing drug tests, evading law enforcement detection, or arrest for growing marijuana plants would fall in this category. |
| Any product that contains CBD, Hemp Oil that is not in compliance with the Farm Act | The Farm Bill ensures that any set of chemical compounds found in the cannabis plant—that is derived from hemp will be legal, if and only if that hemp is
produced in a manner consistent with the Farm Bill, associated federal regulations, association state regulations, and by a licensed grower.
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| Bidding fee auctions (a.k.a. penny auctions) | Merchants that charge a fee to bid on a product or service. For example, the merchant places an item up for auction. Each time the bidder places a bid, the consumer is charged a fee regardless of whether they are the winning bidder. If the consumer placed ten bids, they are charged ten times. |
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Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Business/investment opportunities operating as get rich quick schemes/Home based internet businesses (e.g. real estate investment with no money down, work from home etc.) | Characteristics include but are not limited to merchants offering/stating one or more of the following:
When it sounds too good to be true it probably is. That should tip the consumer that the outcome described by the merchant is not realistic |
| Charities without evidence/proof of 501(c) (3) or equivalent status | Charities must provide a copy of the 501 (c)(3) tax exempt status form issued by the IRS at the time of application in order to be considered acceptable.. Not all charities have a tax exempt status as evidenced by a 501 (c)(3) exemption and those without such status are considered Unacceptable. |
| Collection agencies or firms involved in recovering/collecting past due receivables | Collection agencies or firms that collect past due receivables on behalf of other businesses. |
| Computer software (e.g. anti-virus) sold via inaccurate advertisements; Home Based Computer Software, anti-virus with scareware | These firms may induce cardholders to purchase software by provide false information regarding the status of their computer or the capabilities of their
existing software. For example, the merchant may infer that the cardholder’s computer is infected with a virus and is required to purchase anti-virus software from the merchant to remove the virus. The merchants may also falsely claim to increase the computer’s speed. Furthermore, these merchants may also infer that they are the manufacturer or operating system provider of the cardholder’s computer |
| Counterfeit goods/replicas | Business that sell replicas or fake products designed to look like the designer name products. This definition includes merchant that disclose upfront that their
product as replicas or fakes. |
| Credit card protection or identity theft service | Businesses that offer to assist cardholders in protecting their credit cards from theft/fraud or will assist cardholders in notifying issuers of theft. This definition
includes entities that offer to monitor a consumer’s credit bureau, prevent the theft of their identity or assist in the restoration of their identity. |
| Credit repair/restoration | Includes but is not limited to merchants that offer services designed to repair a consumer’s credit report, correct or remove negative information on the credit report or assist a consumer in restoring their credit history or score. This includes merchants that offer “How To” guides on this subject. |
| Cruise lines | Merchants that provide scheduled passenger service lasting multiple days. Payments are normally taken far in advance of the cruise. This does not include merchants that offer day trips with limited prepayment (for example, day tour of New York Harbor or evening dinner/dance cruises, day fishing charter or
ferries). |
| Cryptocurrency and related businesses | Merchants that sell or offer access to cryptocurrency, a form of digital asset based on a network secured by strong cryptography. |
| Data pass (merchants up-selling or cross selling products or other merchants and then sharing the cardholder data with the third party or receiving cardholder data from third parties) | Merchants engaged in this type of Unqualified/Unacceptable behavior will attempt to have the consumer purchase a product or service provided by another entity. Often this product or service is only displayed at check out or noted in the terms and conditions. Often the consumer is required to uncheck or opt out in order not to be charged. Upon check out the merchant the cardholder visited passes the cardholder data to another entity for processing of the sale. For example, a cardholder may attempt to purchase shoes on a website and upon check out have a subscription to a magazine about shoes appear in the shopping cart – often the consumer must uncheck the magazine subscription in order to avoid purchasing the subscription. The merchant offering the shoes and the merchant offering the magazine subscription are two different entities. The merchant selling the shoes passes the cardholder data to the merchant offering the magazine subscription for processing. The consumer does not easily understand that they have inadvertently purchased a magazine subscription and is unlikely to recognize the entity that processes the magazine subscription. In this example, the merchant with the shoe website as well as the merchant selling the magazine subscription would both be classified as Unqualified. The merchant websites must be carefully reviewed with special attention directed to the checkout process and the (or lack of) terms and conditions. In addition, we must clearly understand how merchants solicit cardholder |
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Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Debt/interest consolidation or reduction services | Business that offer consumers the ability to consolidate or reduce debt and/or reduce their interest rate. These merchants are generally not the lender but
rather charge a fee to submit paperwork to, or to advocate for the cardholder with, the cardholder’s lender. |
| Decryption and descrambler products including mod chips | Merchants that offer products or software that allow a user to bypass the restrictions set by a manufacturer thereby allowing a user to use the product outside of what the manufacturer allows. For example, the installation of chips or software that allows a user to play video games of one manufacturer on another manufacturer’s console. Also included in this category are merchants that sell products or software that allows a user to descramble cable or video
signals or downloads without the original provider’s permission. |
| Embassy, foreign consulate, or other foreign government, Foreign (non-US) government owned entities (partially or fully) | Merchant accounts owned by foreign governments including their embassies and consulates is prohibited. Including but not limited to: agency, consulate, embassy, foreign ministry, government pension funds, honorary consult, military, sovereign wealth fund, state-owned entity, trade office, or trust. An FFI is defined as any non-U.S. financial institution. The FATCA legislation contains an extensive definition of FFI and includes entities such as banks, custodian institutions, investment funds and certain types of insurance companies withholding and reporting requirements for US account holders |
| Extended warranty companies | Companies that offer warranties designed to repair, service or replace improperly operating products and the warranty extends for a period of one year of
greater. In general, these entities will charge an upfront or monthly fee but may also incorporate the price into the purchase price of the original product or service. |
| Fake references and other services/products that foster deception (including fake IDs and government documents | This includes bit is not limited to such products or services as fake diplomas, unofficial or official identification cards, fabricated social media “likes” or
“followers”. Also included in this category are merchants offering business or personal credit references designed primarily to increase the user’s credit score or profile or merchant offering any service designed to assist a user in fostering deception. |
| File sharing services/cyberlockers | These merchants allow users to store, transfer or share computer files, videos, music and other software via the merchant’s own servers. While file sharing services/cyberlockers may be operating for legitimate purposes, these merchants often inadvertently allow illicit activities such as the sharing of pirated movies, pirated songs or child pornography to occur due to their inability to ensure any content that is stored, transferred or shared among its users does not
involve illicit content or illegal activity. |
| Financial consultants (Internet/MOTO) | Companies that provide financial advice via a card not present environment. |
| Firearms (non face-to-face) | Any entity that sells firearms in a non face-to-face environment. |
| Foreclosure protection/guarantees | These merchants assist the consumer in preventing or stopping foreclosures and charge a fee to file paperwork or advocate on behalf of the consumer. Also
included in this definition are merchants that do not provide the foreclosure protection/guarantee service but rather provide “How To” guides instructing consumers and how to complete these services themselves. |
| Fortune tellers | Any business providing horoscope readings, palm readers, tarot card readers and related services. This includes both card and card not present transactions. |
| Fulfillment centers | Merchants that offer back office services designed to fulfill orders on behalf of other merchants. These services may include one or all of the following – order
taking, warehousing, shipping and customer service. |
| Funds/loss recovery | These businesses offer to help a cardholder recovery abandoned/escheated property or assist in recovering losses incurred due to bad investments,
timeshares sales, or the pursuit of claims against other entities that deceived the cardholder. This includes merchants that sell “Hot To” books, videos, seminars, CDs or website access regarding this topic. |
| Futures, Options & Swaps | A derivative in which two parties agree to exchange one stream of cash flows against another |
| Gambling advice/sports forecasting or odds making | Companies that offer advice on the outcomes of certain events. For example, they may provide a forecast as to the winner of a sports event. |
| Gambling-internet and other card not present gambling | Any merchant processing an illegal gambling transaction including illegal gambling via the Internet or mail order telephone order. This definition includes the loading of value to an account for later use in an illegal gambling transaction. This definition includes card not present pari-mutuel betting and state lotteries. |
| Gambling-legal/regulated brick and mortar/point of sale gambling | This includes but not limited to legally operated bingo halls, casinos, gambling parlors, and racetrack betting. |
| Games of Skill where participants receive cash or cash equivalents | Is a game where the outcome is determined mainly by mental or physical skill, rather than chance and the participants are rewarded with cash or cash
equivalents for their award. Including but not limited to gaming/fantasy leagues. |
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Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Get rich quick schemes | Characteristics include but are not limited to merchants offering/stating one or more of the following:
When it sounds too good to be true it probably is. That should tip the consumer that the outcome described by the merchant is not realistic |
| Hemp (Excluding sterilized hemp seeds or hemp textiles) | Merchants selling hemp, part of the cannabis family of plants. This does not included sterilized hemp seeds or hemp-based textiles. |
| How to books, newsletters, subscriptions or on-line access for ANY Industry shown in this unqualified list | Any merchant providing information regarding any industry on this unqualified list. This information may be accessed online, over the phone, or via books, newspaper or guides. For example, a merchant offering a guide on online gambling or how to sell illegal drugs is considered Unqualified. |
| Immigration services | Passport/visa/citizenship/naturalization – non governmental |
| Intellectual property right violators | Infringement refers to any violation or breach of protected intellectual property rights. Your IP rights may have been infringed upon if your work that is
protected by IP laws is copied or otherwise used or exploited without your permission |
| Investment programs/business opportunities/seminars | Merchants offering courses, seminars, books, CDs, DVDs or other instructional material offering instructions on various investment programs or opportunities. This may include but not limited to purchasing homes with no money down, flipping properties, purchasing tax liens etc. |
| IT services help desks (home-based and offshore) | These companies offer IT support over the phone. This includes assisting consumers with fixing issues with their computer, operating systems or various third
party software, removing malware or installing or de-installing software. |
| Jammers or devices that are designed to block, jam or interfere with cellular and personal communication devices/signals | Jammers are radio frequency transmitting devices that are designed to block, jam or otherwise interfere with cellular and personal communication services, police radar, global positioning systems (GPS), and wireless networking services (WI-FI). Jammers are also commonly called signal blockers, GPS jammers, cell
phone jammers, or text blockers. |
| Lifetime subscriptions (any product or service) | These merchants promise lifetime subscriptions or membership to cardholders. For example, lifetime access to a website or consultations. |
| Lottery Clubs | A group of people pools their money together to buy lottery tickets. If any of the tickets they buy wins, they then split the pot. Sometimes, the pool members
agree to let smaller prizes “roll over” by purchasing more tickets with them, instead of cashing out. |
| Male / Female sexual enhancements (Non FDA Approved) | Any merchant that offers sexual enhancements that are not FDA approved |
| Marijuana, marijuana products, marijuana services, and marijuana related
businesses |
These merchants sell or offer access to marijuana. This includes entities that provide services to obtain marijuana as well as entities that provide instructions,
products or services designed to plant, cultivate, distribute or profit from the use or sale of marijuana. |
| Massage Parlors (Unlicensed) | A massage parlor that operates without a license, likely to participate in illicit activity |
| Merchant operating as a front for other businesses | These companies are not the true owners, principals or operators of the underlying business. Instead they may be set up to hide the identity of the true
owners, principals or operators. |
| Merchant, principal or related entities previously identified by any Card Brand for
deceptive practices or any other violation of Card Brand rules. |
Merchant, individual or related parties that were previously identified by any Card Brand for deceptive practices or any violation of Card Brand Rules are
considered unacceptable. |
| Merchants engaged in activity prohibited by the Card Brands | Any entity conducting an activity prohibited by any Card Brand rules or operating regulations. |
Merchants engaged in any form of deceptive marketing practices including but not limited to:
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Merchant with marketing practices designed to deceive card holders are Unqualified. This includes merchants with confusing, contradictory or difficult to find terms and conditions; Terms and conditions with small font; options that are already pre-checked and require the consumer to opt out; Product or service claims that cannot be independently validated; the use of celebrities or third parties without their knowledge or approval; Merchants that make it difficult for a cardholder to cancel or request a refund; Failing to issue refunds in a timely manner; Giving cardholders a very short period to cancel or request a refund; lack of customer service phone numbers allowing for cancellation, poorly staffed customer service call centers. |
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Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Merchants in any Card Brand excessive chargeback or fraud program or merchants
with chargeback or fraud rates over 1% |
Merchant with excessive chargeback rate or fraud rate of over 1% or any merchant in any Card Brand excessive chargeback or fraud program. |
| Merchants offering rebates or special incentives (ie, free gift, prize, sweepstakes, the winning of a contest as an inducement to purchase a product/service, cash competitions. | Any entity that induces consumers to purchase its products or service by offering a significant rebate or opportunity to win a prize. For example, a merchant sells a toaster for $500 but allows consumers to send in a request for a rebate of $450. Another example, the consumer is enrolled in a contest or sweepstake upon the purchase of an item. Also, included in this definition are merchants that charge an entrance or membership fee that allows the purchaser to receive a cash prize. Merchants that offer a nominal rebate on their products are excluded from this definition. This definition includes fantasy sports leagues or games
of skill that offer cash or prizes of material value. |
| Merchants or principals listed on MATCH | Any merchant or individual listed on MasterCard’s MATCH file. |
| Merchants physically located outside the United States (offshore/cross border acquiring) | Card brand rules do not allow us to sign merchants located outside of the 50 U.S. states. U.S. territories such as Puerto Rico, Guam, US Virgin Island are not considered part of the U.S. Merchants must have real operations occurring in the United States. Incorporation, a mail box and a U.S. bank account are not
sufficient. |
| Merchants splitting the sale across multiple transactions | Merchants will attempt to split the true value of the product or service by charging the cardholder over a short period of time (often measured in days or weeks). The product or service is often available to the cardholder upon the initial purchase but the cardholder is not charged in full upon purchase.
Unscrupulous merchants will initiate the multiple charges (instead of one charge) in an attempt to circumvent Card Brands excessive chargeback or fraud programs. For example, a cardholder will purchase, and have immediate access to, a “how to” guide and be charged an immediate fee of $1.99 followed by a subsequent charge of $35.99 seven days later and another $35.99 seven days after that. |
| Merchants that have ransom-like or extortion-like basis for their business model
(e.g. mugshot removal) |
These companies have business practices that are ransom like in nature. This includes but is not limited to merchants that require a cardholder to pay a fee to
remove/delete information from the internet regarding a cardholder. |
| Merchants that use tactics to evade any Card Brand excessive chargeback or fraud
monitoring programs |
Merchants using tactics designed to avoid or evade detection for excessive chargebacks or fraud. This includes, but is not limited to, merchants splitting
transactions, charging a low dollar transaction, creating multiple descriptors/outlets etc. |
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Money Services Businesses:
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completed according to IRS rules and the new property is of the same nature or character (like kind) |
| Mortgage/credit/debt reduction/consulting services | These merchants attempt to reduce the consumer’s loan/line balance or reduce the total interest paid during the life of the loan. This includes business that attempt to restructure a cardholder’s loans/lines or assist the cardholder in reducing the total interest paid by accepting more frequent repayments. |
| Mortgage/loan modification | These merchants target cardholders having difficulty with their mortgage or loan and offer, for a large upfront fee, to represent the consumer to get the bank to “modify” the mortgage/loan terms (e.g. monthly payment, maturity date, interest rate, loan size etc.). These merchants may also offer to assist the cardholder is getting the bank to agree to a “short sell” whereby the bank is willing to accept payment in full for an amount less than the full outstanding balance, thereby allowing the consumer to sell their home. Also included in this definition are merchants that do not provide the actual mortgage/loan modification or short sell service but rather provide “How To” guides instructing consumers and how to complete these services themselves. |
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Pathward – PFAC Unqualified/Prohibited List Version 071222.01 |
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Unqualified/Unacceptable Business |
Description |
| Multi-level marketing/pyramid/affiliate network marketing | These merchants solicits independent distributors to market the product and services. The marketing material/websites often is primarily focused on the growth of the pyramid and not the actual products and services. The leaders of the multi-level marketing organizations often obtain a large percentage of
their revenue for the solicitation of next distributors and not necessarily the sale of the products. |
Negative renewal option following a free or low cost purchase (including pay for shipping only offers) where any of the following apply:
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Where any of the following apply:
This applies to any merchant in any industry selling these products via negative renewals following a free or low cost offer. Merchant will attempt to entice cardholders by offering a product or service for free, at reduced cost or only the cost of shipping & handling. However, as part of that purchase, the consumer will be required to provide their credit card and the card will be subsequently be charged for additional quantities of the product or services unless the consumer cancels. Often the notice of the automated recurring charges is not easily or clearly disclosed to the consumer. In addition, a short time period may be allowed to cancel prior to incurring additional charges. Finally, the consumer often experience difficulty in cancelling the recurring transactions. |
| Nutraceuticals/Pseudo-pharmaceuticals | (e.g. acai berry, health related teas, herbal remedies or drinks, weight-loss, diet pills, anti-aging pills, anti-wrinkle creams, teeth whitening products, muscle building, sexual stimulants supplements, male enhancement products, colon cleansers, detox products, glucose strips, hCG, HGH-like substances, etc.) These
merchants sell products not approved by the FDA that are designed to improve health and well-being |
| Nutritional Supplements/Vitamins/Herbal/Pseudo-Pharmaceuticals/Nutraceuticals sold through mail/telephone order or e-commerce and that utilize negative option/response marketing sales methods (i.e. free or low cost trial) | (e.g. acai berry, health related teas, herbal remedies or drinks, weight-loss, diet pills, anti-aging pills, anti-wrinkle creams, teeth whitening products, muscle building, sexual stimulants supplements, male enhancement products, colon cleansers, detox products, glucose strips, hCG, HGH-like substances, etc.) These merchants sell products not approved by the FDA that are designed to improve health and well-being, sold via Negative Renewal Option (free or low cost trial) |
| Payday loans and unsecured loan/lines originating from non FDIC insured banks | Payday loans (also called payday advance) is a small dollar, high interest loan that is generally due on the borrower’s next payday. Merchants offering payday
loans as well as any unsecured loan or line originated from a non FDIC insured bank are Unqualified. |
| Payment facilitators/third party payment processors/aggregators/payment services companies (e.g., bill pay services, crowd funding, peer-to-peer payments, digital wallets, commissary accounts) | Aggregators/third party payment processors are entities that facilitate payment between buyers and sellers. The entity itself does not provide the product or service to the buyer but rather will debit the cardholder’s credit card or debit card, and then transfer the payment, less fees, to the actual seller’s bank account who in turn provide the goods or services. A third-party payment processor is an entity that helps you receive payments online from your customers without first setting up your own merchant account with a bank In other words, third-party payments processors allow merchants to entirely bypass the need to
own a merchant account. Anything outside a PFAC/ISO/TPSP, MP, CBPS, etc… |
| Prescription drug sales, Internet/MOTO | Entities that sell prescription drugs in a card not present/non swiped environment. |
| Products/services that promote hate, discrimination, violence, harassment or abuse | This includes but is not limited to newsletters, books, website access or membership fees |
| Security brokers, funding portals, and other similar investment entities | Merchants in the business of buying and selling securities for its own account or on behalf of its customers A brokerage acts as a broker (or agent) when it
executes orders on behalf of its clients, whereas it acts as a dealer, or principal when it trades for its own account |
| Substances designed to mimic illegal drugs and/or other psychoactive products
(e.g., K2, salvia divinorum, nitrate inhalers, bath salts, synthetic cannabis, kratom, herbal smoking blends, herbal incense, Delta 8) |
This includes products that may not be specifically banned but provide similar results as banned products. This includes poppers and video head cleaners |
Telemarketing companies involved with the following methods of operations:
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Telemarketing companies involved with the following methods of operations:
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| Tobacco products (including e-cigarettes), Internet/MOTO | Any merchant that sells tobacco products including cigarettes, cigars, snuff, unpackaged tobacco in a non-face to face/non swiped transaction. This definition
includes merchants that sell cigarettes often referred to a “smokeless” or “electronic cigarette” or vapes that do not contain tobacco. |
| Virtual currency | Is Virtual currency that can be monetized, resold, converted, traded into physical/digital goods & services outside the virtual world |