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Who Regulates Merchant Service Providers?

merchant service providers

Electronic payment processing is a highly-regulated system, and this is mainly because it deals with private and sensitive information of consumers. The regulations are put in place to protect the consumers, processors and merchants.

It is the duty of the Federal Trade Commission (FTC) to monitor both processors and merchant services providers. This body ensures that the merchant services providers and processors don`t charge exorbitant fees or misrepresent themselves.

The Federal Trade Commission (established in 1914) is part of Wilson administration’s trust-busting efforts. The commission was developed to enforce the Clayton Act which saw the banning of monopolistic practices. To date, the FTC still discourages anticompetitive behaviors through its Bureau of Competition. FTC also handles complaints of unfair business actions such as deceptive advertising and scams. It is the duty of the Bureau of Consumer Protection to curry out enforcement actions, investigate alleged abuses and give educational materials to the consumers. The Bureau of Economics, on the other hand, provides research support needed by the other two departments. It also analyses the potential effects of the actions of FTC.

Bureau of Consumer Protection in details

The Bureau of Consumer Protection has a mandate to protect the consumers against unfair and deceptive practices/ acts in commerce. Bureau attorneys use the power of the Commission`s written consent to enforce the federal laws that are related to the consumer`s affairs and the rules put into effect by the FTC. The functions of this bureau includes enforcement actions, investigations and business and consumer education. This bureau has areas of principal concern, and this includes financial products and practices, telemarketing fraud, advertising and marketing and privacy and identity protection among others. This bureau also takes care of the United States National Do Not Call Registry.

Bureau of Competition in details

This is the department of the FTC that is charged with prevention and elimination of “anticompetitive” business practices. This division accomplishes its duties through enforced antitrust laws review of the proposed mergers and investigations into other non-merger business actions that might impair competition. Even though the FTC is charged with civil enforcement of the antitrust laws, the Department of Justice still has the Antitrust Division which is able to bring the criminal and civil action in antitrust matters.

The Bureau of Economics

This bureau was established to offer support to the Bureau of Competition and Consumer Protection. It provides expert knowledge related to economic impacts of FTC’s legislation and operation.

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