Credit Card Processor For Work-At-Home Scam Companies Settles FTC Charges

When you respond to an ad promising untold wealth if you start an at-home business, someone in a call center will contact you and try to extract your credit or debit card number. There needs to be a credit card processing company involved to run that transaction, though, and the company that did so for the Tax Club work-at-home scam operation has now settled up with the Federal Trade Commission for its role in the scam.

The products that the Tax Club and its affiliated companies offered to the people who want to start home businesses are about as useless as you’d imagine: overpriced e-commerce sites, business coaching, small-business loans, and other things that did the precise opposite of making their customers rich.

The feds allege that while a payment card processor that the company used, then called Capital Payments and now called Bluefin Payment Systems LLC, was just running cards and not directly involved in the scams, they should have noticed certain flags that should have indicated that their client wasn’t a legitimate business.

These flags included a higher percentage of chargebacks than normal, warnings from banks, and actual chargeback requests from customers saying that they didn’t authorize payments or that they were fraudulent.

If you want to feel like you’ve been punched repeatedly in the ears by human greed, check out this episode of NPR’s podcast Planet Money, which features an actual recording from the FTC’s investigations that follows one Tax Club customer through her interactions with the company. She ultimately gives them $43,000. Spoiler alert: she didn’t cash in on her Internet business.

Her file ends when her daughter calls the company seeking a refund after her death. The call center representative says she’ll receive one, but was he sincere? He talked people out of their life savings in exchange for nonexistent businesses for a living, so who knows?

If the charges to her card were reversed, though, apparently the company’s card processor saw nothing wrong with the transaction. For that, the FTC is requiring the company to carefully screen its clients from now on, and to not process transactions for any clients that the company suspects may be violating telemarketing or other consumer protection laws. It also has to pay a $750,000 judgement because it doesn’t have the full $2.6 million that the agency wants to charge it with.

Payment Processor Involved in The Tax Club Telemarketing Scheme Settles FTC Charges [FTC]
Episode 680: Anatomy Of A Scam [Planet Money]