The Federal Trade Commission announced on Thursday (Feb. 11) a settlement agreement with Capital Payments, perhaps better known as Bluefin Payment Systems, for a total consideration of $2.6 million tied to an alleged telemarketing scheme.
The FTC said in a release that Bluefin enabled the scheme with a firm called The Tax Club, wherein the latter firm used merchant accounts in order to process credit card payments from consumers. The Tax Club then siphoned off money from consumers looking to start home-based businesses.
Yet, said the FTC, Bluefin “ignored red flags” about The Tax Club, which included chargebacks, claims of fraud from consumers and even alerts from financial institutions. The Bluefin/Tax Club relationship ended only after the FTC, along with Florida and New York, sued The Tax Club three years ago, charging deceptive telemarketing practices.
The settlement has a $2.6 million judgement in place that is partly suspended for what the FTC said was the “current financial situation” of the company, with Bluefin agreeing to pay $750,000. The settlement order states that the company is banned from payment processing or acting as an ISO for several categories of clients and prohibited from assisting or facilitating any merchant that might be known, or should be known, to be violating FTC rules.
Looking further out, Bluefin, as part of the agreement, must make efforts to screen prospective clients for certain financial criteria and must also be on the lookout for hints of fraud or deceptive conduct; should there be evidence of firms engaged in deceptive conduct, the company must terminate relationships with those firms.