$40 Million Penalty for Helping Scammers Scam People Like You
- Category: Hall of Shame
One of the biggest payment processing companies and its former executive will pay more than $40.2 million to settle Federal Trade Commission charges they 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, Atlanta-based First Data Merchant Services, LLC (First Data) allegedly ignored repeated warnings from employees, banks, and others that Chi "Vincent" Ko, through his company that served as an independent sales agent (ISO) for First Data, was laundering, and First Data was assisting and facilitating laundering, payments for companies that were breaking the law over a number of years. Ko was later hired as an executive at First Data.
"First Data is paying $40 million because it repeatedly looked the other way while its payment processing services were being used to commit fraud," said Daniel Kaufman, Deputy Director of the FTC's Bureau of Consumer Protection. "When companies fail to screen out fraudsters exploiting the payment processing system to steal people's money, they're breaking the law – and injuring consumers."
How to Protect Yourself?
Watch out for scams! Why do scams continue to work? How do you know when you've been scammed? How can you protect yourself? What can you do? Want to learn more about scams? Check out our related resources below.