The Federal Trade Commission has taken legal action against a payment processing company and two of its former executives, accusing them of processing payments for fraudulent and deceptive companies, including a debt relief organization. Under the terms of the settlement, the company has agreed to a $10 million fine and to stop processing payments for high-risk clients.
Background: The FTC’s complaint alleges that BlueSnap and its executives — former CEO Ralph Dangelmaier and Senior Vice President Terry Monteith — processed millions of dollars in fraudulent credit card payments for ACRO Services. The FTC had previously sued ACRO Services in November 2022 for its fraudulent activities in the debt relief sector. Despite substantial evidence of fraud, including high chargeback rates and direct warnings from Visa and American Express, BlueSnap continued to process payments for ACRO.
The FTC found that BlueSnap and its executives were aware of ACRO’s fraudulent activities and chose not to act. BlueSnap’s fraud monitoring team reported these issues to Dangelmaier and Monteith, but the company continued processing payments for ACRO. Additionally, the FTC found that BlueSnap helped ACRO circumvent fraud detection systems, enabling continued processing of fraudulent transactions. As many as 40% of the company’s transactions were being disputed by consumers as fraudulent and the company continued processing payments for more than a year.
The executives even attempted to help ACRO disguise and misrepresent their businesses to evade heightened scrutiny by the card networks.
Under the terms of the settlement, the defendants will be required to turn over $10 million to provide refunds to consumers, and the defendants are also prohibited from proving payment processing services to debt collection or debt relief companies.
