On December 10, 2020, the Federal Trade Commission (Commission) announced that it reached a settlement with a payment processor and its former CEO for alleged violations of the Federal Trade Commission Act (FTCA).
The complaint alleges that the payment processor illegally processed more than $93 million in consumer credit card charges related to fraudulent schemes. Specifically, the complaint alleges that the payment processor failed to adequately screen and monitor certain of its merchant-clients. The Commission alleges that the payment processor and its former CEO knew or should have known that the company was assisting scammers in defrauding consumers.
The proposed stipulated order, if entered by the U.S. District Court for the District of Utah, will require the payment processor and former CEO to pay $1.5 million to the Commission for consumer relief. The order would prohibit the payment processor from assisting in fraudulent schemes and further impose policy changes, enhanced monitoring and screening requirements, and compliance reporting.