The Federal Trade Commission has reached a proposed $12 million settlement with Humboldt Merchant Services based on allegations that it processed payments for merchants that were shell companies or engaged in fraud.
If entered, the proposed order would permanently prohibit Humboldt from processing payments for certain high-risk merchant categories and from engaging in credit card laundering or tactics designed to evade fraud and risk monitoring.
The action reflects the FTC’s continued scrutiny of payment processors that allegedly ignore red flags of merchant fraud. The complaint alleges that Humboldt knew or should have known that merchants were shell companies or engaged in fraud.
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