Payment Processor and Owner Agree to Permanent Payment Processing Ban and $1.8 Million Judgment to Settle FTC Charges They Violated 2009 Order
Thomas Wells and his payment processing company, Priority Payout Corp., have agreed to settle FTC charges that they repeatedly violated a 2009 court order issued against them. The settlement permanently bans Wells and Priority Payout Corp. from engaging in, and assisting others with, payment processing, and includes a $1.8 million contempt judgment against them.
The 2009 court order found that Wells and his company (then called InterBill, Ltd.) violated Section 5 of the FTC Act by processing debit transactions to consumers’ bank accounts on behalf of a fraudulent enterprise known as Pharmacycards, while knowing or consciously avoiding knowing that those debit transactions were not authorized by consumers. The order required Wells and his company to pay the FTC over $1.7 million, the amount of money consumers lost through the debits Wells and InterBill processed. The order also required that Wells and InterBill more carefully review and monitor their merchant-clients, and prospective merchant-clients, to ensure the merchants were not engaged in deceptive or unfair practices.
The FTC alleges that Wells and InterBill’s successor, Priority Payout Corp., have repeatedly violated the terms of the 2009 order by failing to properly review and monitor merchant-clients. As a result, the FTC alleges, Wells and Priority have facilitated payment processing for numerous fraudsters, causing serious losses to consumers.
In agreeing to settle the FTC’s charges, Wells and Priority Payout Corp. admit that the FTC has sufficient evidence to show that they violated the 2009 order, including that they facilitated processing of consumer payments for merchants while knowing or consciously avoiding knowing that the merchants’ business practices were, or were likely to be, deceptive or unfair. Several of the merchants include defendants sued by the FTC, such as the defendants in the FTC’s cases against Advertising Strategies and Stark Law.
The new settlement order permanently bans Wells and his company from working in payment processing in any capacity, and includes a contempt judgment of $1,812,204, which is in addition to the more than $1.7 million judgment in the 2009 order that remains outstanding.
The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the District of Nevada.
NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.
Find data and trends about fraud in your state by going to our Tableau Public website and clicking on your state.
The Federal Trade Commission works to promote competition and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.