Payment Processor Sued for Helping Debt Relief Scam

The Federal Trade Commission has sued a payment processing business that allegedly assisted and facilitated a telemarketing credit card interest rate reduction scam.

In an amended complaint filed in federal court, the FTC alleges that Independent Resources Network Corp. (IRN) knew or "consciously avoided knowing" key facts about the illegal conduct of a telemarketing scam operated by Innovative Wealth Builders Inc. (IWB), and chose to continue profiting from processing IWB’s credit card transactions. Among the many indicators of illegal conduct that IRN allegedly ignored were IWB’s “alarmingly high chargebacks rates.”

A chargeback occurs when a consumer disputes a charge to a credit card and the charge is reversed. The average chargeback rate in the U.S. is well below 1%, meaning fewer than one out of every 100 credit card transactions is reversed as a result of a chargeback. IWB’s chargeback rate averaged above 20% for several years, and exceeded 40% in multiple months.

“Despite knowing, or consciously avoiding knowing, the illegal nature of the IWB Defendants’ business, IRN processed millions of dollars of credit card transactions for IWB, thereby earning considerable fees for itself while allowing the IWB Defendants to harm thousands of consumers who purchased the IWB Defendants’ bogus credit card interest rate reduction services,” the complaint states.

The amended complaint alleges that IRN is liable for assisting and facilitating deceptive and abusive telemarketing acts or practices in violation of the Telemarketing Sales Rule.

In January, at the FTC’s request, a U.S. District Court in Florida halted IWB’s business operations.