Bluefin Payments Settles FTC Complaint it Enabled a Telemarketing Scheme
Capital Payments – known as Bluefin Payment Systems – is settling a Federal Trade Commission (FTC) complaint that the company enabled a telemarketing scheme to use merchant accounts to process consumers' credit card payments.
The Tax Club allegedly bilked consumers who were trying to start a home-based business. Capital Payments ignored red flags about the Tax Club, such has a high rate of chargebacks, chargeback requests from consumers, and alerts from financial institutions.
Capital Payments ended its relationship with The Tax Club only after the FTC, and the states of Florida and New York, sued The Tax Club in 2013. The complaint charges Capital Payments with assisting and facilitating deceptive telemarketing acts in violation of the Telemarketing Sales Rule (TSR).
A $2.6 million judgement has been imposed, but it will be partially suspended based on the company's current financial situation. The company will instead pay $750,000.
The company is banned from payment processing or acting as an independent sales organization for several categories of clients and prohibited from assisting or facilitating any merchant it knows, or should know, is violating the FTC Act or the TSR.
In addition, Bluefin must screen prospective clients that meet certain criteria, monitor their sales activity to detect indications of deceptive conduct, and terminate contracts with those engaged in deceptive conduct.