On 5/19/2020, the Federal Trade Commission (FTC) announced a settlement of more than $40.2 million against one of the biggest payment processing companies and its former executive. In their release, the FTC explained that the fine will settle charges that the payment processor and its former executive knowingly processed payments and laundered, or assisted laundering of, credit card transactions for scams that targeted hundreds of thousands of consumers.
According to the FTC’s complaint, First Data Merchant Services, LLC allegedly ignored repeated warnings from employees, banks, and others that a former independent sales agent (ISO -Chi “Vincent” Ko), was laundering payments through First Data for companies that were breaking the law over a number of years. Ko was later hired as an executive at First Data. According to the complaint, Ko, as an ISO, opened hundreds of merchant accounts for at least four scams. The FTC alleges that Ko opened accounts under false names, provided Wells Fargo Bank with deceptive information to open the accounts, and ignored evidence that his clients were engaged in fraud. The complaint also alleges that First Data ignored numerous warnings about Ko’s activity and that the defendants violated the FTC Act and the Telemarketing Sales Rule.
The FTC complaint can be found here.