BlueSnap and its former CEO have reached a settlement with the Federal Trade Commission (FTC) after being accused of knowingly processing payments for deceptive and fraudulent companies.
The payments company, along with ex-CEO Ralph Dangelmaier and Senior Vice President Terry Monteith, agreed to pay $10 million in restitution to consumers and to cease processing payments for certain high-risk clients.
According to a federal court complaint, the FTC alleged that BlueSnap and its executives processed millions in credit card transactions for ACRO Services despite clear evidence of the company’s fraudulent activities. The complaint stated that BlueSnap, Dangelmaier, and Monteith “turned a blind eye to glaring warnings” about ACRO’s misconduct from at least 2019 to 2021.
The FTC noted that BlueSnap continued to handle payments for ACRO even after Visa reported that between 29% and 40% of the company’s charges were being disputed as fraudulent. Furthermore, American Express directly requested Monteith to close ACRO’s accounts, but BlueSnap failed to take action.
Additionally, BlueSnap’s internal fraud monitoring team had alerted both Dangelmaier and Monteith about ACRO’s fraudulent activities, yet they did not shut down the accounts. The company faced similar accusations regarding its handling of payments for other fraudulent entities.
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, stated, “Companies like BlueSnap that knowingly process payments for scammers are breaking the law and making it easier to cheat consumers.”