According to the FTC’s complaint, iStream also disregarded other indications of fraudulent activity, including that the primary merchant client involved in the scheme from 2010 through September 2013 was EDebitPay, LLC, a company that had already been subject to previous FTC enforcement actions for engaging in very similar misconduct. IStream, which processed all of the payments for the discount club from November 2010 through April 2016, consistently disregarded the high return rates generated by the discount club transactions, a red flag indicating unlawful debiting. According to the complaint, iStream, working with the merchants, used a type of payment called a remotely created check (RCC) to take the money from consumers’ accounts, causing substantial injury to hundreds of thousands of consumers, often those who could least afford to have funds unexpectedly taken from their accounts without authorization. Payment processors, like iStream, provide merchants with the ability to obtain customer payments for products and services via electronic banking. “The order announced today bans iStream from processing high-risk payments and orders it to pay $2.3 million that can be used to provide refunds to defrauded consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.“Unfortunately, this amount represents a small fraction of the approximately $40 million in total losses suffered by consumers-a direct result of the Supreme Court’s decision in AMG. Without a statutory fix to restore the FTC’s strongest authority to obtain refunds, these consumers, and millions more like them, cannot be made whole.” The complaint alleged that 99.5 percent of the consumers being illegally charged for the “discount clubs” never accessed any coupons, and that tens of thousands called the defendants to try and cancel the charges, while thousands more disputed the charges directly with their banks. Consumers were enrolled in the discount club scheme online and through outbound telemarketing.
#Istream it all plus
About the FTC Show/hide About the FTC menu itemsĪ payment processing company that allegedly helped a bogus discount club scheme debit tens of millions of dollars from consumers without authorization will be required to pay $2.3 million and face a permanent ban from working with high-risk clients as a result of a Federal Trade Commission lawsuit.Īccording to the FTC’s complaint in the case, which was first filed in 2017, iStream Financial Services and its senior officers, Kris Axberg and Richard Joachim, allegedly debited money from consumers who were seeking payday or cash advance loans, but were enrolled in a bogus coupon service and charged initial fees up to almost $100 plus as much as $19.95 each month.
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