FTC pursues action against payment processor

On Behalf of | Jul 6, 2022 | Blog, White Collar Crimes

Misleading merchants and scams are happening. Residents of California may want to learn more about action by the FTC against a credit card processor. The payment processor opened accounts for a company that formerly was the target of an FTC suit.

According to law sources, the credit card processor opened up 43 accounts for separate companies as part of the scam. The FTC is taking action on this processing company for ignoring the laundering scam. In fact, the scammers totaled more than $4.6 million in consumer credit card charges.

Processor gave advice

The credit card processor also helped the scammers, by giving advice to them. They told them how to spread the charges among the vague businesses. This was in order to avoid detection.

Prevention for further harm

To prevent further harm to consumers, the processing company and its two owners must make important changes. The FTC, however, cannot fine them because of a previous case, in which monetary judgment was not allowable.

Some new changes for the processor

With an eye to these white collar crimes which harm consumers, this company may not do further credit card laundering. They may not work with high-risk businesses that engage in misleading and deceptive actions. They also have a requirement to screen potential merchants who engage in telemarketing or scams that harm consumers.

New FTC efforts

The FTC is cracking down on companies that facilitate harm to consumers as well as those who originate these scams. The transmission of illegal robocalls is also under the FTC microscope. Processing businesses may be accountable for failure to be sure that those who they are serving are in compliance with consumer protection laws.

The FTC cited a payment processor for doing business with a company engaged in money laundering and fake companies. Especially notable is that the scammers were previously sued by a government agency. Now, the FTC is taking action against the enabler, the processing company.