The Bank’s Latest Tactic to Shut Down Loan Modification Firms

I got a call today from someone who is in the loan modification business In Arizona. He told me that if you’re a loan modification company, you will not be allowed to have a merchant account with Wells Fargo anymore. Even if you’ve had months of success, no charge-backs, or no complaints… your account will just be terminated because Wells Fargo has apparently decided it doesn’t like what you do for a living.

And that will be that.

Wells Fargo has decided that they’re just not allowing loan modification companies to process credit cards anymore. So may be Bank of America. And throughout the day I’ve talked to one after another that said their bank had terminated their merchant account abruptly and without cause.

I spoke with Blake Campbell of AVP, a national merchant service provider. Blake has been in the merchant account business for the past five years, and will now be working with Mandelman Matters to help loan modification firms obtain a merchant account so they can accept credit cards, a critical component of serving a population that cannot currently make their mortgage payment. He confirmed what I’d been hearing. In fact, one of the business owners that I spoke with was a client of Blake’s, and he confirmed what that business owner had told me.

No charge-backs… no complaints… and no account anyway.

I spoke with Blake at length about what’s happening and he said:

“Recently I’ve been seeing accounts get terminated without any complaints or charge-backs on their records. And the only thing they have in common is that they’re all loan modification firms. Shutting down a merchant account like that at the wrong moment can force a firm out of business. Especially if that firm had no idea it was coming.”

Really? Why that’s positively fascinating.

Now, I know what some of you are going to say: It’s the banks right not to serve an industry, but I don’t think that’s the point. The point is that this is just another tactic in their fight to get rid of private sector loan modification firms. And that seems very wrong to me. Discrimination even.

It seems like the bank is inventing and then enforcing some kind of “rule” in order to obtain a competitive advantage. Like vigilante justice… unfair competition. It seems that way because that’s exactly what it is. Don’t even try to tell me that loan mod scams are the reason, because that would force me to point out some of the things that I can buy on a credit card, which is something I could not do in mixed company.

When a customer is terminated, they’re listed on the Customer Terminated Merchant File (TMF), a database that acts like a black list for banks. Few if any banks will touch an account that’s been TMF’d.

Oh, this is getting better and better… I wonder what took them so long to figure it out.

For more information on how you can protect your firm from the bank’s latest offensive tactic, write to me at or call me at 714-904-2288. I’ll personally recommend you and put you in touch with Blake immediately. This really is a classless move by the banks in my opinion, and Blake and I have worked out several options from which you can choose depending on your individual situation.

We’ve already helped a number of firms and very effectively, I might add.

What if the banks stopped liking some other industry for whatever reason? Or other people. These are the same banks that the government has said are too big to fail. Maybe we should be afraid of them after all.

Anyone feel like cowering?

I don’t cower.

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