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First Data (Fiserv) Merchant Service Will Pay $40 Million In Federal Trade Commission Deal Over Consumer Scams
First Data merchant service has come to an agreement with the Federal Trade Commission over consumer scams. The company will pay $40 million to settle the claim by FTC. According to FTC, the Company laundered credit card transactions and processed payments for scams targeting thousands of consumers.
According to this agency, “The ex-vice president of this company through his former company First Pay Solutions, opened hundreds of fake merchant accounts and shell companies to take payments from the unwary”.
The company said:
“This agreed resolution, which relates to a single U.S.-based ISO within the wholesale channel, is in the best interest of First Data Merchant Services, our clients and their customers, and consumers. We remain committed to ensuring that our business partners and merchants operate with integrity, and our enhanced practices will enable us to continue to lead the industry in fraud prevention, and business and consumer protection. Resolving this matter allows us to remain focused on serving our clients and their customers with excellence, and supporting our associates during this critical time”.
FTC claimed that First Data that is considered as one of the biggest payment processing companies in the US has received many warnings and direct evidence regarding the ex-vice president. Still, the company allowed Ko and First Pay to open merchant accounts till 2014.
The agency said, “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”.
FTC filed a complaint in the Federal Court in Manhattan. The agency announced that they would do a settlement with Ko and First Data.
Fiserv Inc. that acquired First Data merchant service in July said in a statement, “The settlement relates to a single U.S.-based independent sales organization and that the deal is in the best interest of First Data Merchant Services, our clients and their customers, and consumers”.
Britt Zarling, a representative of Fiserv said in a statement, “The company remains “committed to ensuring that our business partners and merchants operate with integrity”.
Jim Walden, lawyer for Ko is of the opinion that his client will pay more than $270,000 to settle a claim that First Pay Solutions “allowed a small number of rogue independent agents to sign up fraudster merchants for credit card processing”.
This article provided by Bloomberg News.