Credit Risk Management

Question 0

What is credit risk?

Answer 0

When the merchant is unable or unwilling to fulfill its obligations to its customers

Question 1

What are the three parts for transaction to take place?

Answer 1

Authorization
Settlement
Chargeback

Question 2

What is fraud risk?

Answer 2

When the merchant processor transactions that are unauthorized by the cardholder or not as agreed.

Question 3

What top accounts generate the majority of credit risk?

Answer 3

Airlines
Department stores
Furniture stores

Question 4

What are the mainstream merchant population generates fraud risk?

Answer 4

Mom-and-pop pizzerias,
Auto shops
Clothing stores

Question 5

What is FDMS new account approval rate?

Answer 5

94%

Question 6

What are some typical unqualified industries due to image concerns, Association prohibition, legitimacy, illegal or likely to be illegal or high-risk?

Answer 6

Pornography
get rich quick schemes
Internet sale of tobacco
drug paraphernalia

Question 7

What does OFAC stand for?

Answer 7

Office Foreign Asset Control

Question 8

How are credit profiles identified?

Answer 8

A= Strong credit 
B= Stable/Good credit
C= Satisfactory/Fair credit 
D= Marginal credit/Special mention 
E= Poor appraisal/Sub Standard
F= Likely loss/Business failure