FTC Reaches Settlement with Card Processor Used in Work-at-Home Telemarketing Scam

February 15, 2016, Written By Bill Hardekopf
Concept of Customer Support liar with long nose

Capital Payments LLC has settled with the Federal Trade Commission for $2.6 million in fines after allegedly processing unauthorized credit card payments resulting from a telemarketing scheme that targeted people wanting to start home businesses. Capital Payments worked with a group called The Tax Club, which went after consumers trying to start a business from home.

Capital Payments, also known as Bluefin Payment Systems LLC, received several warnings about The Tax Club, but did not cut ties with the organization until the FTC sued The Tax Club in 2013. The group had a high rate of credit card reversals and requests for credit card charge reversals from consumers, and several financial institutions alerted Capital Payments about the red flags prior to the separation.

The FTC alleged that Capital Payments assisted The Tax Club in deceptive telemarketing practices that were in violation of the Telemarketing Sales Rule. After speaking to customers, representatives would use merchant accounts to take money from credit cards of unsuspecting consumers.

While the settlement is $2.6 million, Capital Payments is only paying $750,000 at this time “based on the company’s current financial situation.” If the FTC finds out the company has misrepresented its financial status in any way, Capital Payments will be asked to pay the bill in full immediately.

Under the settlement, Capital Payments is no longer allowed to process payments for various categories of clients, and must carefully screen potential clients to watch out for deceptive conduct.



The information contained within this article was accurate as of February 15, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.