Account relationships with entities that process payments for telemarketers and other merchant clients could expose financial institutions to increased strategic, credit, compliance, transaction, and reputation risks.
Account relationships with these higher-risk entities require careful due diligence and monitoring as well as prudent and effective underwriting.
Payment processors pose greater money laundering and fraud risk if they do not have an effective means of verifying their merchant clients' identities and business practices.
A financial institution should assess its risk tolerance for this type of activity as part of its risk management program and develop policies and procedures that address due diligence, underwriting, and ongoing monitoring of high-risk payment processor relationships for suspicious activity.
Financial institutions should be alert to consumer complaints that suggest a payment processor's merchant clients are inappropriately obtaining personal account information.
Financial institutions should act promptly when they believe fraudulent or improper activities have occurred related to a payment processor.
Chief Executive Officer
BSA Compliance Officer
FDIC Guidance for Managing Third-Party Risk
(FIL 44-2008, June 2008)
FFIEC Handbook on Retail Payment Systems
FFIEC Handbook on Outsourcing Technology Services (June 2004)
FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual
Guidance on Payment Processor Relationships
Guidance on Payment Processor Relationships - PDF (PDF Help)
Michael Benardo, Chief, Cyber Fraud and Financial Crimes Section, at firstname.lastname@example.org or (202) 898-7319
FIL-127-2008 - PDF (PDF Help)
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2008/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).