Payment processor Humboldt Merchant Services will pay $12 million and be permanently banned from processing for high-risk merchants, under a proposed settlement with the US Federal Trade Commission announced on 8 September [1].
The FTC's complaint says Humboldt processed payments for more than 1,000 shell companies fronting for unauthorised-billing scams, including Legion Media, which the FTC shut down in 2024 [1].
It says those accounts typically ran chargeback rates almost 10 times what card brands treat as excessive [1].
What it covers
The order bars Humboldt from processing for four kinds of merchant [1]:
- straw companies;
- merchants on Mastercard's MATCH list of terminated merchants;
- merchants already subject to law enforcement;
- some online sellers whose only address is a rented mailbox.
The order also bars credit card laundering, false information on merchant applications, and tactics to dodge fraud monitoring, such as moving transactions to a lower-risk bank identification number [1].
The $12 million is for consumer redress. The commissioners voted 2-0 to file the order in federal court in Michigan [1].
What it does not tell you
Whether Humboldt broke the law. The charges are allegations, and the order takes effect only when a judge signs it [1].
How much consumers lost through the shell merchants. The release does not say [1].
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