Nuvei Case Turns Chargebacks Into an FTC Warning Sign

Federal regulators are tightening the screws on payment processors, and it’s going to change how you manage your merchant accounts. The FTC recently targeted payment processor Nuvei, alleging they ignored 'red flags'—specifically high chargeback rates—from merchants involved in deceptive practices. For any retailer or operator using consumer financing or credit card processing, this is a loud signal that 'high-risk' behavior will no longer be ignored by the companies that sit between you and the banks. If your business sees a spike in chargebacks or consumer disputes, your processor is now under immense legal pressure to cut you off or face massive fines themselves. The FTC is essentially deputizing processors to police their own clients. This means you can expect more frequent audits, stricter underwriting when you apply for new financing programs, and less leniency if your dispute rates climb above industry standard thresholds. If you are operating in a vertical that naturally sees higher returns or disputes, you need to tighten your documentation and customer service protocols immediately to avoid being flagged as a high-risk liability by your lending partners.

Source: PYMNTS

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