Payment Processor Pays $1.6M in Fraud Settlement
A payment processing firm and two related corporations agreed to pay nearly $1.6 million to settle a civil complaint accusing them of assisting fraudulent outbound telemarketers, the Federal Trade Commission said yesterday.First American Payment Processing Inc., Phoenix, electronically debited bank accounts to knowingly process payments for telemarketers who deceptively sold advanced-fee credit cards, the FTC said. The company also violated rules governing the Automated Clearing House Network, through which First American processed the payments, according to the FTC.
Along with the payment, First American agreed to a ban from processing orders for outbound telemarketers, though the company may continue to process orders on consumer-initiated calls as long as it does not violate other laws. First American also must investigate the business practices of potential clients and obtain documents from them showing compliance with ACH Network rules before processing payments for them.
Also named in the FTC's complaint were Check Processing Center and CET Corp., related companies that before May 2000 did business as First American Payment Processing. First American's two principles, president/CEO Carl E. Towner and vice president/CFO Matthew Robinson, along with their wives, also were charged.
