interesting... opening merchant accounts under shell companies to process transactions for something completely different than what your merchant application says is a felony, yes? lots of shady operations used to do this back in the day until they started cracking down on it
Thats not what he said! He only said mention something different to the BANK when opening an account. Nothing shady about that, lots of companies are doing that including myself. Most banks even advice companies to make a global description about your company to avoid problems. For example they dont like adult companies so most of those companies open an account saying they have an internet company. It isnt a lie, its just not specific!
Secondly he doesnt say the merchant account is from the same bank. Most of the times merchant accounts are provided online through secondary parties and secondary banks...For example most banks in Holland dont even have a merchant department because nobody uses creditcards here only when they are forced when for example they go on holiday and need to book a hotel. 90% of europeans doesnt have or doesnt use a creditcard!
Actually, he did say that. Applying for a mid as a software company when you're really using it to process crypto currency purchases is not the same thing... why do you think he even said it like that? No low/regular risk merchant accounts will approve that shit because of chargebacks.
mis-coding transactions and lying on your merchant application is definitely not "legal". If the card companies find out that you are doing this they will kill your accounts instantly.
I put "legal" in quotes because I just don't know if it is a heavy fine levied by the card companies or a felony now. The adult industry has been doing this for years and it finally got cracked down on because of cross-sales and other misc. bullshit they pulled.
He did not mention MID, he only said "apply for a bank account" and later on "so we can get creditcard up and running". At least that is what is mentioned in the email links posted in this topic. So that can also mean he just wants to open a bank account (his current one is suspended) as that is needed to receive funds from his merchant account...its possible he already has an active mid..
But indeed if he does try to open a mid and lies about his transactions then its a matter of time before they get closed, probably faster then he thinks as they will check his server ip address and all sites hosted on it..
But maybe i just dont see it as shady as i really hate the rules of the creditcard companies...who are they to tell what customers can and can not buy or what merchants can and can not sell... if its only a chargeback problem then just ban merchants who have to much chargebacks or let them pay for all costs...what they do now is assuming you have lots of chargebacks and therefor ban you upfront...it
doesnt make sense...