CFPB Settlement Bans Payment Processor, Founder, Imposes $500k CMP

The CFPB recently resolved a case that it had brought last spring against a third-party payment processing company and its founder for allegedly helping bad actors scam older adults, entering into a settlement that bans the company and its founder from participating in business activity involving payment processing, consumer lending, deposit taking, debt collection, telemarketing, or financial advisory services, and imposing a civil money penalty of $500,000.  The payment processor had already ceased operations in 2019.

Specifically, the CFPB’s enforcement suit alleged that from 2016 to 2018, the company, run by its founder, processed remotely-created check payments (i.e., check payments that do not require the consumer’s actual handwritten signature) for telemarketing companies that scammed consumers into purchasing unnecessary and expensive computer software and services in spite of being aware of significant indications of fraud.