Payment processor New Beginnings NY Inc. and owner Kenneth Newton agreed to pay $71,640 to settle charges brought by the New York attorney general's office that the company withdrew money from consumers' bank accounts for identity theft protection that was never provided.

Newton also has been ordered to shut down both New Beginnings and Ironwood Management Group, a consumer collection agency he operated.

Cheektowaga, N.Y.-based New Beginnings worked as the payment processor for Phoenix Trust. New Beginnings allegedly electronically withdrew funds from bank accounts between June 26, 2013 to July 11, 2013 and deposited the money into another account to pay for the identity theft services.

Newton stated that he believed Phoenix Trust was selling identity theft protection for $398 to consumers. He said Phoenix Trust would give him a spreadsheet with the names and bank routing numbers of consumers that it said it sold the kits to. 

Newton then would create a physical check for $398 with the consumer’s bank account information on it and deposit the checks in his account, then transmit payment to Phoenix Trust after taking a commission. However, Phoenix Trust failed to provide identity theft protection and consumers received nothing in return for the $398 deducted from their accounts.

Officials with Phoenix Trust, as well as Newton, could not be immediately reached for comment on the settlement.?

"Mr. Newton allowed scam artists to prey upon innocent consumers who were, in fact, trying to ensure their financial security, violating their trust and taking their hard-earned money," Attorney General Eric Schneiderman said. "This settlement sends the clear message that businesses that process payments for scam artists will be held accountable."

The settlement payment is the total restitution that will be provided to defrauded consumers.

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