Saying that taking action against payment processors is an effective way to reach foreign and domestic businesses that scam consumers, the FTC has announced it has settled with two such processors, Nuvei and Humboldt Merchant Services.

“Payment processors are crucial intermediaries between businesses and consumers that must take their role seriously and operate in good faith to screen out bad actors; they should be able to do so without fear that they will become responsible whenever an associated merchant behaves poorly,” Commission Chairman Andrew N. Ferguson and Commissioner Mark R. Meador said. “But if payment processors do not take their fraud-prevention role seriously, the Commission will move swiftly to compel them to do so.”

They continued, “A consumer cannot use their credit or debit card to purchase goods or services from a merchant unless that merchant has a relationship with a third party that gives them access to the card networks.”

They said that because payment processors control most merchant access to the debit- and credit-card ecosystem, they are in a good position to protect the integrity of the payments system against scammers. “The entire American debit- and credit-card ecosystem depends on processors guarding this access responsibly and in good faith,” they added.

Following are the two settlements reached with the FTC.

Nuvei

In its complaint, the FTC contended that Canada-based Nuvei and its subsidiaries, Nuvei International Group Limited, Nuvei Limited, SafeCharge Digital Limited and Nuvei Technologies Inc., processed payments for scammers targeting U.S. consumers. The FTC said that Nuvei processed more than $30 million in consumer payments for Reimage, an offshore tech support scam, from 2017 to 2023.

Through its merchant acquiring bank registered in Cyprus, Nuvei furnished Reimage and other overseas deceptive tech support schemes with payment processing accounts that enabled the schemes to take credit card payments from cardholders in the United States and elsewhere, according to the FTC. 

The FTC took action against the operators of Reimage in 2024.

“The FTC [alleged] that, in addition to providing credit card processing accounts for Reimage and other tech support schemes, Nuvei’s U.S.-based subsidiary, Nuvei Technologies Inc., also opened and maintained merchant accounts for merchants allegedly selling business opportunities with false or baseless earnings claims such as DK Automation, merchants impersonating government tax authorities such as American Tax Service and merchants that other payment processors or acquiring banks previously terminated for excessive chargebacks or fraud,” the Commission said.

The FTC has brought enforcement actions against DK Automation and its founder and against American Tax Service.

The complaint charged Nuvei with unfair practices in connection with payment processing in violation of the FTC Act and with assisting and facilitating deceptive telemarketers in violation of the Telemarketing Sales Rule.

As noted, the order approved by the court requires  Nuvei to pay $4.85 million, which will be used to provide consumer redress. The defendants also are barred from engaging in unfair or deceptive payment processing practices like those alleged in the complaint.

In addition, the order:

  • Bars Nuvei from providing payment services to anyone selling tech support products or services by telemarketing or by pop-up messages related to security or performance issues on a computer or other device. 
  • Prohibits Nuvei from  misrepresenting pertinent facts when seeking merchant accounts or other processing services, whether for itself or on behalf of others, and bars it from trying to get around the fraud and risk controls that banks and card networks use, such as by “load balancing” (spreading transactions across multiple accounts in order to reduce the number of fraudulent transactions or chargebacks on any one account).
  • Requires Nuvei to screen and monitor any existing and prospective clients, including those in certain merchant categories, such as outbound telemarketing, and conduct more intense screening and investigation of any existing client whose chargeback rates exceed the limits set forth in the order.

Humboldt

The FTC said that Humboldt processed payments for more than 1,000 merchants that were shell entities that served as fronts or pass-throughs for fraudulent companies engaged in unauthorized billing scams, including Legion Media, which the FTC shut down in 2024. 

The FTC’s complaint alleged that Humboldt:

  • Opened and processed payments for merchants it knew, or consciously avoided knowing, were shell companies used by undisclosed third parties engaged in fraud and typically incurred chargebacks at rates that were almost 10 times higher than what credit card brands view as excessive. 
  • Tried to increase the volume of transactions processed through these sham accounts by placing them on a lower-risk bank identification number, or “BIN,” that was licensed by the credit card networks and used by an affiliated entity, making it more likely that issuing banks would approve the attempted transactions.

As noted, under the order approved by the court Humboldt is required to pay $12 million for consumer redress and prohibited from assisting others who are engaged in credit card laundering.

The company is also barred from processing payments for straw companies; merchants on the Mastercard Member Alert to Control High-Risk Merchants (MATCH) list for reasons including excessive chargebacks, laundering and fraud; merchants that have been subject to law enforcement action; and e-commerce entities that use third-party mailbox providers, such as UPS stores, as their only business location and either use negative option billing, are new or do not have past processing history.

Humboldt also is prohibited from “making or assisting others in providing false or misleading information to obtain payment processing, such as misleading information about merchants in applications for merchant accounts.”

In addition, the company is prohibited from “engaging in, or assisting those engaged in, tactics to avoid fraud and risk monitoring, including load balancing.”