FTC Says Proposed Consent Decree Prohibits Nexway From Helping Scammers

A proposed consent decree will prohibit Nexway from providing credit card laundering for tech support scammers.

The Federal Trade Commission (FTC) has filed proposed consent decrees in which the multinational payment processing company and its subsidiaries, an associated company, and two of its executives have agreed not to conduct payment laundering and to closely monitor high-risk clients for illegal activity, the FTC said in a Monday (April 17) press release.

“Companies like Nexway that knowingly launder charges for scammers are breaking the law and helping scammers cheat money from consumers,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in the release. “The FTC will not hesitate to use its law enforcement powers to stop them.”

Reached by PYMNTS for comment, a Nexway spokesperson provided a statement saying that the company cooperated with the FTC in reaching this resolution, that the employees responsible for the conduct described in the complaint are no longer with the company, and that the company remains focused on helping businesses with their digital transformation.

“All company levels have been educated on the risks, and additional vigilance and precautionary measures have been implemented, particularly on [customer due diligence (CDD)] processes,” the statement said. “Our teams are confident in the compliance program it has put in place to promote and ensure integrity in its relationships.”

The statement added that Nexway has been working with leading brands for 20 years and that it is recognized as a trusted partner in payment data security and customer safety.

The FTC’s complaint and proposed court orders apply to Nexway and several subsidiaries, an associated company called Asknet, Nexway CEO Victor Iezuitov and Chief Strategy Officer Casey Potenzone, according to the press release.

The complaint alleges they processed tens of millions of dollars in credit card charges for multiple tech support scammers since at least 2016, all the while knowing that their clients were tech support scammers, the release said.

The proposed court orders prohibit the defendants from laundering sales through their merchant accounts, require them to screen and monitor clients found to be at high risk of violating the law, and prohibit them from providing payment processing for tech support scammers, per the release.

It also imposes monetary judgments, according to the press release.

Tech support scammers use phone calls, pop-up warnings, and online ads and listings to fraudulently convince consumers that there’s a problem with their computer and that the scammer will fix it, according to the FTC website.

In one case, the FTC sent refunds of over $1.7 million to consumers who fell victim to a scam in which consumers were convinced to purchase tech support services after being falsely told that their computers had malware, viruses or other types of security bugs.

The scammers used popups and advertising on search engines purported to be from major tech companies that cajoled consumers into purchasing tech support that wasn’t necessary.