According to the new FDIC guidance on third-party payment processors, there may be "risks associated with relationships with third-party entities that process payments for telemarketers, online businesses, and other merchants."
"These relationships can pose increased risk to institutions and require careful due diligence and monitoring," the guidance says.
"Account relationships with high-risk entities pose increased risks, including potentially unfair or deceptive acts or practices," the FDIC says. "Certain types of payment processors may pose heightened money laundering and fraud risks if merchant client identities are not verified and business practices are not reviewed.
Financial institutions should be alert to consumer complaints or unusual return rates that suggest the inappropriate use of personal account information and possible deception or unfair treatment of consumers, the guidance warns.
"Improperly managing these risks may result in the imposition of enforcement actions, such as civil money penalties or restitution orders," the FDIC states. Have a comment on this story? Please click "Comment" below. If you'd like to contact Dark Reading's editors directly, send us a message.