January 09, 2008

Citi Merchant and First Data Corp's Backdoor Gun Control

Citi Merchant Services and First Data Corp has decided to implement their own form of gun control, refusing to process credit card transactions between firearms retailers, distributors, and manufacturers, according to a press release issued by the National Shooting Sports Foundation, a trade association for the firearms industry (h/t Hot Air).

CDNN Sports, Inc, a Texas-based firearms distributor, provided a copy of the notice of termination in which states in part:

We discussed with Mr. Crawford [of CDNN Sports Inc] said termination due to the sale of firearms in a non-face-to-face environment. Keep in mind that a violation of the Gun Control Act occurs when a gun offered online is sold to an individual in another State; the act prohibits selling a handgun to a resident of another state. Shipping across state lines is also banned, yet guns for sale online reach people across the country. We at Citi Merchant Services are unable to monitor or track adherence to these Gun Control laws.

A charitable explanation of this decision would be to state Citi Merchant Services and First Data Corp lawyers are grossly incompetent. Online retailers do not sell firearms to individuals, and to suggest otherwise is ignorant, if not duplicitous.

Firearms "purchased" online are shipped from a distributor to a local Federal Firearms License (FFL) holder who has authority to sell firearms from the federal government. Once this FFL holder—typically retail establishments— receive the firearm, all individuals must complete a FBI NICS background check via Form 4473 and/or comply with state and local firearms regulations regarding retail firearms purchase. It is only after these background checks are satisfied that the local retail purchase actually occurs, face-to-face. There is never a direct sale from the online site to a non-FFL holding retail customer, as the termination notice incorrectly states, and does not in any way violate GCA '68.

At worst, this is an attempt at backdoor gun control, preventing manufacturers from shipping firearms to distributors, and from distributors to retailers. In doing so, Citi Merchant Services and First Data Corp seem to assert that it is their responsibility to enforce laws, which is a patently absurd position. They are not the FBI nor the BATF, the two federal agencies tasked with enforcing these laws.

The firearms industry, of course, can easily voice their displeasure with their wallets by changing to other credit card transaction processing services that actually employ lawyers capable of understanding the applicable law.

I hope the company or companies that profit from this send Citi Merchant Services and First Data Corp lawyers a nice gift basket.

Update: I'll send you over to SayUncle for a response from Citi Merchant Services and First Data, showing that they are, indeed, completely ignorant of the law and how firearms sales are conducted.

Posted by Confederate Yankee at January 9, 2008 03:48 PM

Well, that Citi card has a zero balance anyway.
I guess I'll be sending to them in shreds with a little note attached.

Posted by: iamnot at January 9, 2008 04:32 PM

I'm sure he's already aware of this post Bob, but in case he's not I forwarded a link to Insty. If he chooses to link it maybe a little publicity will help change some minds at CITI.

Posted by: Boss429 at January 9, 2008 05:39 PM

I am not tearing up my Citi-Bank Visa. I am not cancelling my account. I am reserving it to make all my online gun purchases. (I do have a C&R FFL.)

At least this is what I will do till June when the 0% interest special deal is up.

Posted by: Ron W at January 10, 2008 09:39 AM

Sounds more like the legal departments have got them in a CYA mode.

They are exercising excessive caution possibly with the idea of not being involved down the line as a member of the chain in the sale of a gun that some hot shot lawyer decides to sue all the way up the distribution chain as enablers of some gun related incident.

They as bean counters look at the dollar volume in a year and balance their profits versus their projected worst case liability.

So it may be strictly a cold business calculation on their part.

Posted by: Lurker at January 10, 2008 09:43 AM

Well having worked for Citibank in a previous incarnation, I can tell you they have cancelled accounts before for people and companies involved in the firearms business. It began with Sandy and apparently has continued. Too many self serving dolts in that company to survive if you have a mind and the desire to actually do something useful....

Posted by: ScottG at January 10, 2008 09:50 AM

It would be interesting to see if they can notice how many NRa members/supporters they used to enjoy for customers.

Posted by: Bill Teller at January 10, 2008 10:56 AM

Hmmm... I canceled $60k worth of credit with Citi after they sponsored the RaTHergate/Bush National Guard show on CBS.

I guess I'll have to get a card of theirs just for Gun purchases. I wonder if I can get one with an NRA logo?

Posted by: Bombast at January 10, 2008 11:01 AM

Well, coincidentally, I was doing my online banking and ordering a check sent to them this morning. Then I read this. The check is now for the full amount and contains a cancellation notice referring to their anti-gun policy. Now I need to go write a letter to make it stick...

Posted by: ubu at January 10, 2008 02:09 PM

Well, coincidentally, I was doing my online banking and ordering a check sent to them this morning. Then I read this. The check is now for the full amount and contains a cancellation notice referring to their anti-gun policy. Now I need to go write a letter to make it stick...

PS: I think you broke; it's rejected me repeatedly due to comment overload.

Posted by: ubu at January 10, 2008 02:11 PM

Never assume conspiracy where stupidity will suffice.

Posted by: Just Sayin at January 10, 2008 02:15 PM

Both phones now roll over to voicemail:

June Rivera-Mantilla (631-683-7734) requests that you not leave a voicemail, but send email to

Her purported supervisor, Robert Tenenbaum (631-683-6570) claims he is not her supervisor, and repeats the request that email be sent.

Fair enough. Sent email, with questions, and a request for a response. Left both individuals a voice message (I don't take direction well), asking to be informed as to who June's supervisor actually is, and for his/her contact information.

Sounds like they are both having a special day.


Posted by: Largenfirm at January 10, 2008 02:57 PM

Here is NSSF's response to the anti-gun corporate policy employed by First Data and Citi Merchant Services.

January 10, 2008

Dear :

This is to confirm the National Shooting Sports Foundation’s receipt of your e-mail response on behalf of First Data Corporation and Citi Merchant Services on Wednesday, January 9, 2008, concerning First Data and Citi Merchant’s unilateral decision to stop processing credit card transactions involving the lawful sale of firearms by law-abiding, federally-licensed, firearms distributors/retailers. Regrettably, your e-mail serves to confirm the anti-gun corporate policy of First Data and Citi Merchant Services and that the article in our publication “Bullet Points,” and subsequent posting to our Website, was based on a correct and accurate understanding of that policy as articulated in the December 26, 2007, letter to Mr. Charlie Crawford at CDNN Sports Inc.

We had hoped to hear from First Data Corporation and Citi Merchant Services that this was not your corporate policy and that the letter was merely the ill-considered actions of a single employee.

Your anti-gun corporate policy is based on ignorance of the law applicable to the sale of firearms. It is perfectly legal, in fact commonplace, for a federal firearms licensee in one state to sell a firearm to a non-licensee (consumer) from another state. What you fail to appreciate is that the firearm is not shipped in interstate commerce directly to the consumer. Rather, as required by federal law, the firearm is shipped by the selling licensee to another federal firearms licensee in the state of residence of the consumer who is purchasing the firearm. The consumer acquires the firearm from that licensed dealer in a face-to-face transaction after completion of a Firearms Transaction Record, commonly referred to as an ATF Form 4473, and a federally-mandated background check to ensure that the purchaser is legally permitted to buy the firearm.

Furthermore, the policy of First Data and Citi Merchant Services interferes with the receiving and shipping of inventory from and to federally licensed firearms retailers, distributors and manufacturers. This inventory supplies not only law-abiding Americans, but military and law enforcement agencies as well.

June River-Mantilla’s original correspondence contained so many errors that one could only deduce that it was an uniformed mistake that would consequently be corrected. Instead, we learned yesterday that First Data Corporation and Citi Merchant Services stands behind the policy, which affects not only firearms retailers, manufacturers and distributors, but also law enforcement agencies at the federal, state and local levels of government and law-abiding citizens.

NSSF will not remove its Web posting nor will we rescind or alter our story. However, if we receive written confirmation from you that, after having researched the law, First Data and Citi Merchant Services have changed their corporate policy, we will consider publishing that fact in a follow-up story.



Posted by: NSSF at January 10, 2008 03:27 PM

I'd love to know whether the VPC or a similar gun grabbing group sent correspondence to these guys trying to misrepresent the nature of what is going on with their customer's internet business. Thinks like "interference with contract" "alienation of prospective business relationships" and "defamation (per se)" come to mind.

If I were CDNN I'd file the lawsuit just to get discovery of whether those sorts of things were going on in the back ground. As it stands, they've got a basic "good faith and fair dealing" claim in most states anyway.

Posted by: Gonzo at January 10, 2008 03:59 PM

Here's a copy of the note I just forwarded to all my credit card providers through their various account management Websites

Please answer the following question regarding my account. Is First Data Corporation or Citi Merchant Services in any way involved or associated with my credit card account - including the processing of charges?

Unfortunately, it has been brought to my attention that FDC and Citi Merchant Services have initiated a campaign against Firearms Dealers.

I have been very pleased with my service from your company up to this point and it is my sincere hope that your firm has no exisitng relationship with FDC or Citi Merchant Services. As a lifetime participant in shooting sports and a lifetime member of the NRA - I could not abide such a policy and would be forced to cancel any associated accounts. Please advise as to the nature of any such relationship.

With Thanks,

Posted by: SHOTandTACKLE at January 10, 2008 05:20 PM


I'm pretty sure you're asking the wrong party. If I understand it correctly, FDC and CitiMerchant are providing their services to the business (for example, a gas station) itself, basically handling the credit card processing for them.

Posted by: Kevin at January 10, 2008 08:25 PM


Generally what you say is correct - but it is important to recognize that FDC processes many (in fact, I believe, the majority) of all credit card transactions in the United States. What's more, as I recall, they have the largest credit card production and distribution facility in the country (an incredibly secure site in Nebraska) and I know for a fact that they produce and distribute many of the cards issued by big name banks.

I agree that the problem is largely one tied to merchant services but I believe that a company must be held accountable for the actions of its employees, divisions, and key vendors. If my cards were issued or produced by FDC - then I will look to get a card from another issuer.

I have already cancelled one of my cards over this. I guess its just a personal choice - but as an FFL - it's a pretty simple one for me.

Posted by: SHOTandTackle at January 11, 2008 01:52 AM

Is Bloomberg hidden somewhere in this picture?

Posted by: davod at January 11, 2008 09:07 AM