On January 18, the Consumer Financial Protection Bureau (CFPB) announced that it had agreed to a settlement with a payment processing company, resolving allegations that the company assisted third parties in profiting from fraudulent services and products. The proposed stipulated judgment, if entered by the court, will resolve allegations that the company was processing remotely created check payments—payments that do not require signatures—for companies and third party service providers that sold products and services through fraudulent telemarketing schemes. The CFPB alleged the payment processor continued to process payments even after it was aware of consumer complaints and investigations into the fraudulent activity. The CFPB’s complaint, first filed in March of 2021 in the U.S. District Court for the Northern District of Illinois, alleged that the company violated the Consumer Financial Protection Act (CFPA), the Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act), and its implementing rule, the Telemarketing Sales Rule (TSR).
The stipulated judgment and order will bar the company and its owner from payment processing and other consumer financial services-related operations, as well preclude them from engaging in debt collection and telemarketing activities related to consumer financial products or services. Additionally, under the terms of the agreement, the owner of the payment processing company agreed to pay a $500,000 civil money penalty.