A payment processor which had been cited for violations in July 2019 has agreed to a settlement with the Federal Trade Commission (FTC) and the state of Ohio.
The allegations included charges that the processor unlawfully processed payments for multiple scam operations.
Madera Merchant Services, LLC, B&P Enterprises, LLC, and their owners Bruce C. Woods and Patricia Woods, along with Madera officer Victor Rodriguez, were cited in the order. They agreed to be banned permanently from payment processing.
“Payment processors who help scammers steal people’s money are a scourge on the financial system,” FTC Bureau of Consumer Protection Director Andrew Smith said in a press release announcing the order. “When we find fraud, we are committed to rooting out payment processors and other companies who actively facilitate and support these fraudulent schemes.”
The order includes a monetary judgment of more than $8.6 million, but the FTC and state of Ohio agreed to mostly suspend the penalty because of an inability to pay. The order did, however, force the companies and individuals to surrender the contents of a number of bank accounts, along with defendants’ personal property.
The order said the defendants used remotely created payment orders and remotely created checks (RCPOs) to facilitate payments for unscrupulous merchants, allowing them to draw money from consumer victims’ bank accounts. The FTC alleged that the defendants used RCPOs to process millions of dollars for student debt reduction and credit card interest reduction telemarketing schemes.
The FTC’s Telemarketing Sales Rule prohibits the use of RCPOs in connection with telemarketing sales.