Judge Tosses The CFPB's Case Against Global Payments

Noting that the CFPB had “blatantly” ignored his directions, a federal judge in Atlanta has officially dismissed the case against Atlanta-based payment processor Global Payments and three others for allegedly aiding fraudulent debt collectors.

The CFPB had alleged that Global Payments and three similar processing firms — Frontline Processing, Pathfinder Payment Solutions, and Electronic Merchant Systems — were liable for failing to prevent purported crooks from repeatedly using their automated payments systems to steal millions of dollars from victims.

That came as part of a civil suit filed in the U.S. District Court in Atlanta, wherein the federal watchdog agency went after about a dozen debt collectors, telemarketing firms and payments processors in metro Atlanta and Buffalo, N.Y. That suit alleges these firms scared consumers into paying debts they didn't actually owe via the mass use of robocalls inundating them with reports on “phantom” debts that didn't actually exist.

Global Payments and the other payments firms were also culpable, according to the CFPB, because the alleged fraud wouldn’t have succeeded if the payment processors had properly screened and monitored the debt collectors. Moreover, the CFPB alleges that Global Payments and the others shouldn't have given these groups such wide access to customer accounts while there were clear signs of illegal activity.

Last week, however, U.S. District Judge Richard Story dismissed the CFPB's civil complaints against Global Payments and three other payments processors — after accusing the board of repeatedly stonewalling the defending lawyers’ efforts to find out the facts of the case against their clients.

“The CFPB willfully violated the court’s repeated instructions to identify for defendants the factual bases for its claims and that, in each deposition, it willfully failed to present a knowledgeable …. witness,” Story said in his order dropping the companies from the agency’s case.

The judge noted that the CFPB resisted allowing its staff members to be questioned in depositions, then produced uncooperative witnesses.

“Together, they demonstrate a willful disregard of the court’s instructions,” he noted.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.