First Data Guns Down Merchants
Effective today, First Data has just terminated all of its firearm merchants selling in non face-to-face transactions. For those of you not familiar with credit card processing, First Data is responsible for more than 60% of payment processing in the United States. They have not only terminated many of these legitimate and established merchants but they have done so while holding all outgoing funds. Several banks have followed suit with CitiGroup (NYSE C) immediately jumping on the bandwagon and Bank of America (NYSE BAC) expected to follow.
While I personally don’t own a gun, nor plan to, I respect the rights of people to legally own and legally sell them. While the system isn’t perfect, for major banks and processors to take a stance like this is wrong and illegal. I suspect that the National Rifle Association will follow up with an official response.
Please don’t make this a matter of whether you agree with gun sales or not, it’s not the job of First Data or any such private organization to take this stance. I imagine that the matter will be overturned in court.
Let’s see, what industry is next? People, this is a prime example of my earlier post today and I hope that the government steps in immediately to stop private industry from making such decisions immediately. Whatever your opinion is on firearms, this is only the beginning. Because if this manages to stick, before long your industry may be next.
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Comment by Stevens on 9 January 2008:
Not talking about the right to have a gun or not, private companies are not the ones that should control it, are they?
Comment by Link888 on 9 January 2008:
I don’t feel happy about it, there are no many companies operating illegally out there why don’t they do there and catch them instead of doing useless things?
Comment by Alberto on 9 January 2008:
I think that everyone is entitled to have a gun or not, and this right should not be commanded by private companies, but by a government specialized agency.
Comment by Richie on 9 January 2008:
I think that is a right thing to do, the government is so busy and messed up with other things that private companies would take a better control of everything, yes to that decision.
Comment by BCR229 on 9 January 2008:
This is bravo sierra. Firearms are legally sold and shipped from manufacturer to distributor to dealer all the time. The only transactions that, by law, must be face-to-face are sales to individuals.
Comment by paul elvington on 9 January 2008:
less people die from firearms than Aids. are we to outlaw or ban commerce to those envolved in the spreading of Aids? the mis-handling of fire arms can cause injury or death, unprotected (mishandling) sex can cause injury or death. in the name of equality i demand the same rational decision to be exercised at those who practice un-safe sex.
Comment by phishnjosh on 9 January 2008:
So now what?
What CC processing Co. accepts online gun transactions!!!!!
Comment by Mike on 9 January 2008:
I think one’s opinion on this move really depends on whether he/she supports freedoms related to guns. It isn’t illegal for these companies to do this though because they can pick their customers, they aren’t discriminating based on race or sex or anything. It doesn’t violate the 2nd amendment either because face-to-face deals can still be done.
Comment by Thomas M. on 9 January 2008:
This is going to get ugly, as First Data and CitiBank during a financial crisis has just given the finger to a multi-billion dollar industry. Not to mention gun owners, dealers, and small retailers that operate under current Federal and State laws.
I have personally canceled myCitiband cards and even though I don’t sell firearms or ammo, I will be getting rid of my First Data CC Terminal.
This also affects the US mil., US Federal Law Enforcement, and State & Local Law Enforcement. As they all use CC to make on-line purchase, phone in orders, and faxed order for purchase of specialty equipment packs, body armor and so on. Some of the same suppliers also sell mainline gear such as weapons, mags, ammo, and parts to US mil and FLEO and LEO in full complaince with FEd and State Law.
Thomas M., former a Citibank card holder and First Data Business Customer.
Comment by Nick on 9 January 2008:
Heh, I really hope none of you who support this have any non-PC habits.
Smoke cigars/cigs? Well based on this the CC company has the right to not allow you to buy them.
Drink? Same deal.
Buy porn? Guess what?
Bad Bad Bad precedent. I hope they get reamed.
Pingback by Is CitiBank Ready for a Collapse? | Merchant Talk on 10 January 2008:
[...] could be much higher than expexected only a few weeks ago. Only yesterday, we announced that First Data and Citi moved to hold funds from several legitimate merchants around the country. The company’s official response has [...]
Comment by Riley Poole on 10 January 2008:
We are still waiting for a response from First Data but we’ve heard through the grapevine that they are claiming this has been their policy all along and attributing this move to no longer being able to police their merchant activities. Let’s hope the NRA steps in; I know that they have already taken notice of the post.
Comment by Mike on 10 January 2008:
I’ll take all comers and we will NEVER back away from the gun industry.
Comment by Zak Smith on 10 January 2008:
The irony is that these FFL to FFL interstate transactions are between business who have endured and passed what is usually a 6-12 month licensing/approval process including criminal background checks and inquiries into full local business licensing. In addition, failure to maintain proper paperwork and follow myriad BATFE regulations and laws will usually incur criminal penalties for those business owners. These are hardly the kind of entities that credit card companies need to be worried about.
Comment by Seth on 10 January 2008:
First Data has been known to be dishonest since the early 1970’s, when they sold Unix accounts. They had a contract guaranteeing a school a certain minimum number of logins; what they apparently didn’t realize was that anyone who was logged in could tell how many others were, and they were denying logins when well under their contracted limit.
I just hope some of the gun shops from whom they’re attempting to steal money (”holding all outgoing funds”) survive long enough to own them in the ensuing lawsuits.
Comment by Mark on 11 January 2008:
First Data may claim this has been their policy all along, but since they have not enforced it, and it is not in their contracts, they are probably opening themselves up to massive breach lawsuits. Not to mention charges of conversion for holding the outgoing funds.
Comment by phishnjosh on 14 January 2008:
GUNSAMERICA.COM IS NOW SETTING UP CREDIT CARD PROCESSING ABILITY FOR ALL ONLINE TRANSACTIONS! THEY HAVE GREAT RATES AND NO BS!
THEY JUST LAUNCHED!
Comment by Riley Poole on 14 January 2008:
Who is the sponsoring bank phish?
Comment by Lonnie on 22 January 2008:
It,s The Begining of the end
Comment by Mike R on 22 January 2008:
The first credit card that won’t let me purchase guns or gun related products will not be in my possession for long.
Comment by Willy on 22 January 2008:
It is intelligent decisions like this that put businesses out of business. Good luck!
Comment by Mark on 22 January 2008:
If we allow credit card companies to dictate what we buy, it would seem to me that they are no longer a service that works FOR us. As such I will not allow them to profit from my spending. If I see their name on a card in my wallet….. it will be shredded. I make my desisions as to what is right or wrong, not some profit grabbing, interest collecting, two faced thieves.
Comment by Jim G on 23 January 2008:
We’ll we’ll I wonder who’s behind this.
The odd thing is that Firearm owners by and large are very honest and upstanding people who I might add also have money as “real guns aren’t cheap”.
I think someone has made a big mistake and I hope the firearms community makes them pay for it because after all is said and done “It’s all about the money” anyway you cut it.
Just like the bozo that decided to change the Coca Cola formula years ago and dump the original recipe. That didn’t last long.
Either did he I suppose.
Hit these buggers in the pocket book thats all they understand!
Comment by MICHAEL on 23 January 2008:
Credit card companies are ripping us off as is ,whats new. Now they are telling us what we can buy or not buy!
Comment by Terry Gable on 23 January 2008:
I carry AMX; VISA and a couple of M/C affiliated CC’s
I run around 1800- to 2000 monthly on them while my wife runs lesser amounts
The first time my card is refused is the last time it will be used.
Comment by Allan Robichaud on 23 January 2008:
I will terminate the use of any credit cards in my name, the issuing companies of which are selective in what I may or may not purchase.
When did these corporate bullies become the guardians of the consumer world?
ALLAN ROBICHAUD
Comment by Fiddler S. Green on 24 January 2008:
There are 80,000,000 firearms in the United States and several million members of the NRA and other related organizations.
Keep a list of the anti-gun corporations and simply stop doing business with them.
I closed my account with Bank of America when they began issuing loans and credit cards to illegal aliens. Guess what? There were only 30 other banks I could choose from in my home town, and many of them even paid higher interest rates.
Duh!
Comment by Joe gartner on 24 January 2008:
Corporations such as Bank of America should be permitted to dicdate what we can legally purchase. Nor should a cc processor. All cards I have with Bank of America will be cancelled. There are many other credit card suppliers out there looking for business.
Comment by Iris on 24 January 2008:
Scotland, was established by act of parliament in 1695, and the other, the course of the week purchase with it a certain quantity of subsistence,
Comment by Ray on 11 February 2008:
FYI - According to the news archives, Citibank had a new head of Risk take over back in November and their aim was to look at ways to reduce risk in the face of the subprime crunch. I’m betting that they decided to take a hard look at the firearms industry and others that they determined to be “high risk” businesses. This decision was probably handed down by Citibank to First Data who does their processing.
Just my 2 cents worth of analysis.
There are plenty of other companies that are happy to continue to process these transactions, but it’s still disappointing to see this kind of uninformed policy making in progress.
Comment by Dan on 12 February 2008:
It is a major mistake for companies to take political stances such as these as they are likely to see how many of there customers vote with their dollars and will take there business elsewhere. I’ve closed my citibank credit card account. My mortgage is also through citigroup but I’m not sure what I can do about that or first data.