The Federal Trade Commission announced a settlement Friday with Electronic Financial Group, Waco, TX, and its principals, who are alleged to have assisted deceptive telemarketers by processing millions of dollars through the Automated Clearing House Network, a nationwide electronic funds transfer system.
The defendants are banned from processing payment for any telephone-initiated sales through the ACH Network and are required to pay $3.9 million in consumer redress, the FTC said.
In July, the commission accused EFG, EFG Card Services, Paul McClinton, Jerry Federico and Randy Balusek with processing ACH transactions on behalf of numerous fraudulent outbound telemarketing operations — some of which the FTC previously sued — in violation of the Telemarketing Sales Rule.
The company also was accused of breaching a contractual provision with its bank that required EFG to comply with a prohibition on processing ACH transactions on behalf of outbound telemarketers. It also was accused of deceptively marketing its own advance-fee debit card.