Humboldt Merchant Services Settles FTC Case for Handling Payments from Fraudulent Merchants
Humboldt Merchant Services, an independent sales organization (ISO) specializing in high-risk industries such as gaming and adult entertainment, has agreed to pay $12 million to settle a Federal Trade Commission (FTC) lawsuit. The agency accused the company of processing payments for over 1,000 shell companies involved in unauthorized billing scams between 2021 and 2023. The FTC alleges that Humboldt engaged in credit card laundering by allowing fraudulent merchants to use its merchant accounts under false pretenses, enabling them to bypass standard risk monitoring criteria. As part of the settlement, Humboldt will cease processing for certain high-risk categories and is prohibited from engaging in or assisting with credit card laundering. The company stated that it has already implemented many of the controls outlined in the agreement and emphasized no admission of wrongdoing was made.
Topics: financial fraud FTC merchant services payments