FTC, Ohio AG reach $8.6 million settlement with payment processor
On June 9, the FTC and the Ohio attorney general announced a settlement with a payment processor and its owners (collectively, “defendants”) for allegedly facilitating payments for multiple scam operations. The FTC’s 2019 complaint claimed that the defendants, among other things, generated and processed remotely created payment orders or remotely created checks (RCPOs) that allowed third-party merchants—including deceptive telemarketing schemes—the ability to withdraw money from consumers’ bank accounts (covered by InfoBytes here). According to the FTC, even though the FTC’s Telemarketing Sales Rule (TSR) prohibits sellers and telemarketers from using RCPOs in connection with telemarketing sales, the defendants allegedly marketed their RCPO payment processing services to telemarketers and other merchants considered “high risk” by financial institutions and card networks, and used RCPOs to process millions of dollars for credit card interest reduction and student loan debt relief telemarketing schemes. Under the terms of the settlement, the defendants are permanently banned from participating in any payment processing activities and are prohibited from violating the TSR and the Ohio Consumer Sales Practice Act. The settlement also imposes a monetary judgment of over $8.6 million, which is mostly suspended due to the defendants’ inability to pay.