FTC Settles Claims Against Credit Card Payment Processor

FTC

On December 22, 2015, the Federal Trade Commission (“FTC”) announced that it settled claims under the FTC Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act against participants in a purported credit card money laundering scheme wherein the defendants allegedly helped enable third-party telemarketing scammers to charge consumers’ credit cards.  According to the FTC’s complaint, the defendant helped “open and maintain merchant accounts used to process credit card payments for sales made by a number of different third-party scammers.”  All told, over $1 million in payments to consumer credit cards was allegedly laundered through accounts that defendants helped secure.  According to the FTC, the defendants played an active role in the credit card laundering scheme by helping set up the accounts and then personally vouching for the shell companies behind the  accounts so that they would be approved.  With the settlement, defendants are permanently barred from (1) payment processing; (2) acting as a sales agent for companies engaged in the telemarketing or who offer certain services such as credit card or identity theft protection; (3) credit card laundering; (4) acting as a sales agent for any company without first screening their business practices; and (5) disclosing, using, or benefitting from any of the private customer information they obtained.  Defendants also agreed to compliance reporting, recordkeeping, and monitoring.  For their role in the scheme, defendants agreed to pay $1.022 million, which was suspended due to their inability to pay, provided they sell their vehicles–a Tesla Model S and a Range Rover SUV.

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