b'in consumer redress and $2 million in civil moneypay the FTC $2.1 million in monetary relief, and bans penalties to the CFPB. JPay also agreed to a prohibitionthe companies from selling consumer credit services, on charging fees on the prepaid cards, except formisrepresenting the financial status of a consumer, inactivity fees after 90 days of inactivity. and selling a consumers financial account information In announcing the consent order, Director Choprawithout their consent.issued a separate statement containing several keyThen, in February, the FTC announced settlements with insights for the consumer finance industry: Electronic Payment Solutions of American and Electronic JPay charged a number of fees on its prepaidPayment Solutions to resolve alleged violations of cards, even though people could not obtain theirthe FTCA and the Telemarketing Act. Specifically, money through other means, shop among prepaidthe FTC alleged the companies assisted in a credit card providers, or readily cash out the cards with- card laundering scheme by obtaining and maintaining out paying a fee. In effect, JPay abused its marketfraudulent merchant accounts that allowed them to make power created by single-source government con- over $6 million in credit card charges. The settlement tracts for prepaid cards; included a suspended judgment of $10.9 million. Finally, in July, the FTC announced two joint settlements In some cases, the misuse of a dominant position inobtained with the assistance of the Ohio Attorney the offering of consumer financial services, whereGeneral against various companies for alleged violations consumers cannot easily switch, is unlawful underof Section 5 of the FTCA and the TSR. One action the Consumer Financial Protection Acts prohibitionresolved allegations brought against Educare Centre on abusive practices; and Services, Inc., Tripletel, Inc., and Globex Telecom This case illustrates some of the market failures andfor making false and unsubstantiated promises and harms that occur when the disbursement of govern- guarantees that they would reduce interest rates on ment benefits is outsourced to third-party financialconsumers credit cards. In the other action, Madera services companies that fail to adhere to the law.Merchant Services, LLC and B&P Enterprises, LLC, Important benefits like unemployment insurance,were alleged to have created and processed payment stimulus checks, tax refunds, higher education ben- orders allowing fraudsters withdraw money from victims efits, and juror pay are often disbursed or managedbank accounts. The FTC will distribute $2.3 million in by companies offering products and services sim- consumer refunds as a result of the two settlements.ilar to JPays. The CFPB will continue to scrutinizeState AGs Settle with Citibank for $4.2 Million Over these companies, particularly when law violationsAlleged Credit Card Overchargesand abuses of dominance undermine the intent ofIn February 2021, the state Attorneys general for such government benefits, and where the harmsNorth Carolina, Iowa, Massachusetts, New Jersey, and fall heavily on people who are struggling financially. Pennsylvania (State AGs) announced a $4.2 million settlement with a national bank to resolve allegations FTC Takes Action Against Payment Processors andthat it overcharged credit card interest for certain Consumer Credit Services Providers customers, in violation of the CARD Act and state law. The FTC was somewhat active in the space, announcingAccording to the settlement agreement, the State AGs at least four card-related settlements in 2021. First, inconducted a joint investigation into whether Citibank January, the FTC announced a settlement with Seedfailed to reevaluate and reduce APRs for certain Consulting, LLC and Credit Navigator, LLC, resolvingconsumer credit card accounts between 2011 and 2017. allegations that the companies violated the FTCA, TCPA,Citibank self-identified and self-reported the issues TSR, CROA, and CRFA. Specifically, the FTC allegedwith its APR practices, and self-initiated remediation by the companies were party to a credit stacking schemeproviding over $335 million in restitution between 2017 that misled consumers into paying the companiesand 2020. The State AGs also alleged that the same opening personal credit cards on their behalf in order toAPR practices violated state consumer protections laws participate in trainings offered by third-party partners,by overcharging interest to affected consumers. While and then deceived customers into believing they wouldCitibank denies any violation of state law, it will pay be able to make $100,000 after participating in theapproximately $4.2 million in consumer redress to the programs. The settlement requires the companies toState AGs in order to resolve the allegations.30'