The Consumer Financial Protection Bureau (CFPB) rampage on credit card “add-on” products continues with Citi being forced to pony up more than $700 million for sins related to credit card add-on products and services.
eLayaway layaway payment processor has released its eLayaway “Virtual Terminal” brick & mortar version of its popular online layaway application, allowing brick & mortar retailers, telemarketers and home service/repair technicians to offer, manage and automate layaway programs. The “Virtual Terminal” solution automatically drafts the payments from the consumer’s funding preference (checking account via ACH, debit cards and stored-value cards) for orders placed. The “Virtual Terminal” feature is the first all-new feature released under the recently launched eLayaway version 2.0 private beta and expands a merchant’s options when offering layaway in multiple sales channels.
Services is offering high risk merchant accounts to their network of banks worldwide.
These programs are designed to allow high risk merchants credit card
processing capabilities. By acknowledging past financial hardships,
the company’s credibility with the merchant provider rises and the
chances of becoming approved are much greater. If the business’s credit is
subpar, however, and has experiences issues with previous merchant accounts, it might have to
setup a reserve account, which protects the processor from any future
losses. The reserve account for your high risk business will be
calculated as a percentage of a projected average of total sales. This
saves the high risk merchant account from being shut down due to
MoneyGram has agreed to pay $18 million in consumer redress to settle
FTC charges its money transfer system was used by fraudulent
telemarketers to scam millions from consumers between 2004 and 2008. The
FTC concluded MoneyGram agents knowingly helped fraudulent telemarketers
who tricked U.S. consumers into wiring more than $84 million within the
U.S. and to Canada. These consumers were tricked by being told they were
falsely hired for a secret shopper program, they had won a lottery or
were guaranteed loans. In some cases the FTC alleges MoneyGram agents in
Canada actually participated in these schemes. Moreover, 131 of its more
than 1,200 agents accounted for more than 95% of the fraud complaints it
received in 2008 regarding money transfers to Canada. At least 65 of
MoneyGramâs Canadian agents have been charged by Canadian or U.S. law
enforcers with, or are currently being investigated for, colluding in
fraud schemes that used the MoneyGram system.
As of October 1st, the FTC will apply new fees for telemarketers that
access numbers on the “Do Not Call Registry”. The first five area codes
are free, and organizations that are exempt from the Do Not Call rules,
such as some charitable organizations, may obtain the entire list for
free. Telemarketers must subscribe each year for access to the Registry
numbers. The access fees for fiscal year 2010 (from October 1, 2009 to
30, 2010) are based on the Do-Not-Call Registry Fee Extension Act of
the Actâs provisions, in fiscal year 2010, telemarketers will pay $55
to Registry phone numbers in a single area code, up to a maximum charge
for all area codes nationwide. Telemarketers will pay $27 per area code
for numbers they
subscribe to receive during the second half of the 12-month subscription
The FTC sent out refund checks last week to consumers who
allegedly had been defrauded by Integrity Financial Enterprises over a catalog credit card. The checks average more than $200, which covered more than 85% of their losses. However, the checks must be cashed within 60 days. In 2008, the FTC sued Integrity Financial Enterprises, a/k/a Infinite Financial and National Benefits Exchange, alleging that they promised consumers a “credit card” that could be used like a Visa or MasterCard for an up-front fee of $200 to $300, but which actually could be used only to buy products from the defendantsâ Web site or catalog.
Integrity was sued following the nationwide “Operation Tele-PHONEY” law enforcement sweep in May 2008. A monetary judgment of more than $2.4 million was imposed on Integrity.
The Competition Bureau announced that Lloyd Prudenza has been sentenced
to 15 years in
jail by The U.S. Federal Court in the Southern District of Illinois for
his part in a cross-border deceptive
telemarketing scheme that defrauded close to 40,000 consumers.
Prudenza, Dalglish and Anderson were the principal operators behind
First Capital Consumers Group, which defrauded vulnerable American
consumers who had poor credit histories.
Working out of boiler rooms in Toronto in 2001-2002, telemarketers
residents, claiming they had been approved for a MasterCard or Visa
credit card. The victims were required to pay a one-time processing fee
(approximately $200 U.S.) prior to receiving one or both cards, but
never received a valid credit card. This deceptive telemarketing
operation generated approximately $8 million U.S. Prudenza, Dalglish and
Anderson were arrested following an investigation
led by the Competition Bureau. They were charged with offences under the
Competition Act and the Criminal Code, including: deceptive
telemarketing; conspiracy to commit an indictable offence; fraud; and
possession of property obtained by crime. Earlier this year, Dalglish
was sentenced to 19 years and seven months
in prison, and Anderson was sentenced to 23 years and four months, for
their roles in this scheme. All three individuals were jointly ordered
to pay over $5 million U.S. in restitution to the victims.
The FTC reports it has settled the second of 13 complaints
brought as part of the multi-agency law enforcement sweep in May 2008
against deceptive telemarketers and the companies they operated
throughout the USA. The “Operation Tele-PHONEY” sweep encompassed more
than 180 cases that included both civil and criminal actions
in the U.S. and Canada. The first “Tele-PHONEY” settlement came in
September, when the agency secured a court order requiring another
advance-fee telemarketer to turn over $1 million for consumer
redress. In the latest settlement Florida-based Integrity Financial
Enterprises and National Benefit Exchange allegedly deceptively marketed
advance-fee credit cards to consumers nationwide. The defendants charged
consumers who accepted the cards an up-front fee of between $200 and
$300, and promised them they would receive a credit card with a credit
limit of $2,500 to $7,500, as well as a $1,000 cash advance limit.
A court order imposed a monetary judgment of more than $2.4 million
against the two firms in the second “Tele-PHONEY” settlement.
Under “Do Not Call” amendments adopted in August, effective this week, any permitted prerecorded message must provide the called consumer with an interactive means to opt out of receiving future calls from the seller or fundraiser using the prerecorded message. Moreover, the consumer must be able to opt out at any time while the message is playing by pressing a particular number or speaking a particular word. Once the consumer has opted out, his or her phone number must be automatically added to the in-house “Do Not Call” list of the calling seller or fundraiser. Then the call immediately must be disconnected so that the consumerâs line is cleared. The automated opt-out requirement is the first of two measures provided by the recent TSR amendment to protect consumersâ privacy at home. The second measure prohibits telemarketing calls that deliver prerecorded messages to anyone who has not agreed in advance to receive such calls. But until September 1, 2009, sellers may continue to use prerecorded messages in calling consumers with whom they have an established business relationship. After that date, sellers may use prerecorded messages only in calls to consumers who have expressly agreed in advance to receive them.
Canadian seniors are increasingly becoming the victims to fraudulent
marketing and financial scams, having lost a total of $6 Million in
2007. In response, Capital One and SeniorBusters, the volunteer
component of PhoneBusters, have teamed to educate seniors on spotting
fraud before they are victimized. Fraudsters attack by mail, telephone
and Internet and most commonly committed identity theft in 2007 with a
$6,421,952 total loss. This crime was followed by the “Nigerian Letter”
scam which claimed $4,935,030, investment scams accounting for
$3,553,320 and scams offering phony prizes accounting for $3,506,289.
Additional findings show those aged 50-59 lost a total of $8,595,593.57,
followed by those aged 60-69 who lost $7,660,202.49, 70-79 lost
$6,928,425.82, those aged 80-89 lost $5,508,172.27 and those aged 90-99
lost $1,870,654.67. Capital One Canada is headquartered in Toronto,
providing Canadians with credit cards since 1996, and is a division of
Capital One Bank.
The Office of the Comptroller of the Currency has ordered Wachovia Bank pay restitution to all consumers effected by its relations with telemarketing organizations and payment processors, to contribute $8.9 million to consumer education programs and to pay $10 million in civil money penalties to the U.S. Treasury. Having profited through fees collected on remotely created checks(RCC) by telemarketers and payment processors for questionable products and services such as grant writing kits, identity theft certificates, medical discount plans and vouchers for discount travel/groceries, Wachovia is to forfeit the generated revenue, plus $5 million to fund elderly consumer education programs, is required to develop new RCC policies and make restitution to consumers who file claims certifying funds were withdrawn without their authorization.
The OCC has issued an advisory regarding the relationships between banks and processors in which the processor uses its bank relationship to process payments for merchant clients. By implementing the appropriate controls over processors and their merchant clients, the OCC says a bank should be able to identify those processors that process for fraudulent telemarketers or other unscrupulous merchants and to ensure that the bank is not facilitating these transactions. In the event a bank identifies fraudulent or other improper activity with a processor or a specific merchant client of the processor, the bank should take immediate steps to address the problem, including filing a Suspicious Activity Report when appropriate, terminating the bank’s relationship with the processor, or requiring the processor to cease processing for that specific merchant.