Markets Wired

A Canadian company, RevenueWire, and its CEO, Roberta Leach, will pay $6.75 million to settle Federal Trade Commission charges they laundered credit card payments for, and assisted and facilitated, two tech support scams previously sued by the FTC.

“Finding ways to get paid – without getting caught – is essential for scammers who steal money from consumers,” said Andrew Smith. “And that’s exactly what RevenueWire did for tech support scammers when it laundered their transactions through the credit card system.”

According to the FTC, RevenueWire entered into contracts with payment processors to obtain merchant accounts to process credit card charges for its own sales of eBooks and software. The contracts prohibited RevenueWire from submitting third-party sales through its merchant accounts. In reality, however, RevenueWire used its accounts to process credit card charges and collect payments from consumers on behalf of ICE and Vast, two companies that allegedly used tech support scams to bilk consumers out of millions of dollars.

According to the FTC’s previous lawsuits against ICE and Vast, the companies’ telemarketers deceptively used a common feature on computers called Event Viewer to misrepresent that consumers’ devices had viruses or performance problems and needed to be repaired at a cost of hundreds of dollars. RevenueWire also processed charges for lead generators—such as operators of deceptive websites—that directed consumers to call ICE and Vast.

RevenueWire and Leach knew of ICE’s unlawful activity. Moreover, RevenueWire’s own fraud analyst called Vast’s owners and managers “a bunch of crooks.”

The complaint alleges that the defendants violated both the FTC Act and the Telemarketing Sales Rule (TSR).

Under the terms of the proposed settlement, the defendants will be required to pay $6.75 million. In addition, the defendants are permanently banned from any further payment laundering or violations of the TSR. They also will be required to thoroughly screen and monitor high-risk clients to ensure those clients are not misleading consumers.

The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 5-0. Commissioner Christine S. Wilson issued a concurring statement. The FTC filed the complaint and final order in the U.S. District Court for the District of Columbia.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by a judge.