On September 1, 2017, the Federal Trade Commission announced that a Utah-based operation had been banned from the payment processing business under a settlement with the FTC. The operation was accused of helping deceptive telemarketers obtain millions of dollars from consumer credit card accounts.
The FTC alleges that G2 Consulting and its owner, Chad Gettel, offered telemarketing schemes in and around Phoenix, Arizona. The schemes allowed the company to obtain consumers’ money by offering them worthless money-making opportunities, which were involved with illegitimate grants and websites linked to Amazon.com.
Gettel is now servicing time in prison after pleading guilty to mail fraud charges associated with the scheme. In order to process card payments, a merchant must have an account with a financial institution, which is a member with a credit card association. The FTC claims that the telemarketers would not have met the eligibility requirements set by financial institutions.
Instead, the company created straw companies to hide the identities and practices of the telemarketers. In return, this allowed them to avoid the eligibility standards. Simultaneously, the defendants recruited people to act as nominal principals of the straw companies. G2 Consulting and its owner, Gettel have been charging with violating the FTC Act and the FTC’s Telemarketing Sales Rule.
The settlement order was announced on Friday. In agreement with the order, the company will be banned from acting like a payment processor, independent sales organizations or sales agents for processing services. The defendants have also been barred from benefiting from the consumer information that they collected.
The order also imposes a judgment of more than $3 million, but it has been suspended due to the defendants’ inability to pay.