BlueSnap Settles $10 Million with FTC Over Payment Processing for Fraudulent Companies

Explore the latest news about BlueSnap’s $10 million settlement with the FTC over payment processing for fraudulent companies. Understand the implications for financial compliance and fraud prevention in the fintech industry

In a significant settlement with the Federal Trade Commission (FTC), payments processor BlueSnap, along with its former CEO Ralph Dangelmaier and SVP Terry Monteith, has agreed to pay $10 million to consumers. The settlement also mandates that BlueSnap ceases processing payments for certain high-risk clients.

The FTC’s complaint alleges that BlueSnap and its executives knowingly processed credit card payments for ACRO Services, despite substantial evidence indicating fraudulent activity. ACRO Services was flagged for defrauding consumers between 2019 and 2021.

According to the complaint, BlueSnap, Dangelmaier, and Monteith ignored warning signs regarding ACRO Services’ fraudulent activities. Despite reports from Visa showing a significant percentage of disputed charges as fraudulent and direct communication from American Express urging account closures, BlueSnap continued to process payments for ACRO Services.

Furthermore, internal reports from BlueSnap’s fraud monitoring team also highlighted ACRO’s fraudulent behavior to Dangelmaier and Monteith. Despite these alerts, the company failed to take action to terminate ACRO’s accounts.

The FTC’s director of the Bureau of Consumer Protection, Samuel Levine, emphasized that companies like BlueSnap, which knowingly process payments for fraudulent entities, are complicit in facilitating consumer fraud. The settlement underscores the FTC’s commitment to holding such entities accountable and protecting consumers from deceptive practices.

BlueSnap’s agreement to the settlement reflects a significant step towards addressing concerns surrounding payment processing for high-risk clients and reinforces the importance of compliance with consumer protection regulations.