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FTC Announces $10M Settlement With BlueSnap, 2 Former Executives

The Federal Trade Commission (FTC) has announced a settlement with payment processing company BlueSnap and its former CEO Ralph Dangelmaier and former Senior Vice President Terry Monteith.

The FTC charged these defendants with knowingly processing payments for deceptive and fraudulent companies from 2019 to 2021, the agency said in a Wednesday (May 1) press release.

In its federal court complaint, the FTC charged that the defendants processed credit card payments for companies accused of fraud, even after being warned by both external and internal sources that those companies were defrauding consumers, according to the release. It also charged that they advised the owners of one of those companies on how to evade fraud detection.

In the settlement, the defendants agreed to pay $10 million and stop processing payments for debt collection or debt relief companies and for companies listed in a fraud monitoring program, per the release.

“Companies like BlueSnap that knowingly process payments for scammers are breaking the law and making it easier to cheat consumers,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release. “The FTC will continue cracking down on firms and their executives that break the law by facilitating fraud.”

In a statement emailed to PYMNTS, BlueSnap CEO Henry Helgeson said that the company regrets the actions of the former employees, intends to comply with all FTC directives and has always had tools in place to identify fraudulent activity on its platform — though those tools were ignored by the executives charged by the FTC.

“Since becoming aware of the investigation two years ago for actions in 2021, we have proactively taken several corrective measures on our own to improve internal review, compliance and risk mitigation processes,” Helgeson said in the statement.

“Most notably, we created a compliance officer position in April 2022 and retained a former FTC attorney to fill that role,” he added. “We’ve also made several changes at the senior management level, which include my arrival as CEO and the departure of the executives named in the report.”

Helgeson added in the statement that he was fully aware of the investigation when he took on the role of CEO at BlueSnap and is confident that the company has “taken all the necessary steps to ensure this will never happen again.”