The Federal Trade Commission is taking action against payment processing company BlueSnap, Inc., along with its former CEO Ralph Dangelmaier and senior vice president Terry Monteith, charging them with knowingly processing payments for deceptive and fraudulent companies.
“Companies like BlueSnap that knowingly process payments for scammers are breaking the law and making it easier to cheat consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
The FTC charged that BlueSnap and its officers processed millions of dollars in credit card payments for ACRO Services despite substantial evidence that the company was fraudulent. The warnings received by BlueSnap and its officers about ACRO were clear. In 2019, BlueSnap was advised to consider closing ACRO’s accounts due to high rates of chargebacks from consumers, but it left them open. Visa repeatedly showed that between 29% and 40% of ACRO Services charges were being disputed as fraudulent. American Express also contacted Monteith asking her to close down ACRO’s accounts, but BlueSnap continued to process payments for over a year.
Furthermore, BlueSnap processed payments for other companies accused of fraud, including Powerline Group. The FTC’s complaint notes that, as with ACRO, BlueSnap was aware of very high chargeback rates and continued to process the company’s payments until it was forced to stop in 2021.
The defendants have agreed to a settlement that will require them to turn over $10 million for consumers and stop processing payments for certain high-risk clients. The settlement will also prohibit the defendants from providing payment processing services to debt collection or debt relief companies, as well as companies listed through an industry fraud monitoring program. In addition, the company will be required to closely screen and monitor other high-risk clients and be prohibited from helping any client take steps to evade fraud monitoring.
The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 5-0. The FTC filed the complaint and final order in the U.S. District Court for the Northern District of Georgia.
The staff attorneys on this matter are Margaret Burgess, Alan Bakowski, and Natalya Rice of the FTC’s Southeast Region.
The Federal Trade Commission continues to work towards promoting competition and protecting consumers from fraudulent practices.
