Straw signing hides a person’s true identity and can be a nefarious tactic that puts businesses at risk. Preventative measures are in place to uphold standards that protect real merchants.
What is a Straw Signer?
In the merchant processing world, a straw signer acts on behalf of a merchant in order to acquire a merchant account. Straw signers are used when the real merchant is unable to submit legitimate business information or be approved for merchant services due to a variety of reasons (poor credit, history of excessive chargebacks, etc.). The act of signing for merchant services for someone who is unable to acquire them is not only fraudulent – it’s illegal in many cases (the sale of firearms and alcohol for instance), especially when the actual merchant is legally barred from signing a merchant account.