FTC and Ohio Join Forces to Protect Consumers

Jul 30, 2019 | Federal Regulation, News

A federal court in Texas recently shutdown a “rogue payment processor” and a “credit card interest reduction scheme” that allegedly took millions of dollars from consumers illegally, according to the Federal Trade Commission (FTC) and the State of Ohio.

“This case is another reminder for consumers to stay away from any company promising to reduce debt for an advance fee,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.  “The FTC will continue to pursue such schemes aggressively, and hold accountable payment processors that are complicit in the illegal conduct.”   

In the first case, the FTC and the State of Ohio claim that Madera Merchant Services and B&P Enterprises violated the FTC’s Telemarketing Sales Rules (TSR) when they generated and processed remotely created payment orders (RCPOs) that were used by telemarketers. 

Madera Merchant Services and B&P Enterprises would allegedly open accounts with a bank or credit union. When the financial institution closed the account after they became aware of “high return rates and other red flags,” the two defendants would then move on to another financial institution. Since 2016, they had opened more than 60 bank accounts with 25 different banks or credit unions. 

In the second case, the FTC and the Ohio Attorney General went after Educare Centre Services, Inc. and Tripletel, Inc. Allegedly, these companies promised to reduce the interest rates on consumer’s credit cards while offering a money-back guarantee if the consumer was dissatisfied. According to the FTC, “these were false promises.”

In addition, the defendants allegedly violated TSR by “charging consumers advance fees before providing any debt relief service, failing to identify timely and clearly the seller of the purported service in telemarketing calls, and failing to pay to access the FTC’s National Do Not Call Registry.”

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