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FTC Announces Key Consumer Fraud Enforcement Actions

By Admin on June 19, 2009 | Last updated on March 21, 2019

The Federal Trade Commission announced two key consumer protection enforcement actions this week: a $1.7 million court judgment against a payment processor that was making unauthorized debits from consumer bank accounts, and the mailing of over $12 million in checks to consumers who had been victimized by unauthorized credit and debit card charges for Internet services.

$1.7M Judgment for Unauthorized "Discount Pharmacy Card" Bank Account Debits. At the FTC's behest, a federal court this week ordered a payment processor -- charged with making unauthorized debits from consumers’ bank accounts -- to pay $1.7M in consumer compensation and to put a stop to the illegal practice.

According to the FTC, in 2006 the agency charged InterBill Ltd. -- which served as a middleman between merchants and banks or credit card companies -- "with unfairly debiting thousands of consumer accounts for a merchant’s nonexistent 'discount pharmacy cards," despite indications that the pharmacy card operation was bogus."

J.K. Publications Credit Card Fraud: $12M in Checks Mailed to Consumers. In the second consumer protection enforcement move announced this week, as a belated result of a successful 1999 lawsuit, the FTC mailed over 400,000 checks worth more than $12 million to consumers who were victimized by an illegal credit card billing scam operated by a company called J.K. Publications.

The delay in time between the lawsuit and the disbursement of the checks was due to the defendants' elusiveness, according to the FTC: "Substantial time passed between the court’s judgment and the issuance of these checks because the defendants moved millions of dollars of their ill-gotten funds offshore, and it took significant time and effort to locate and repatriate the fraudulently obtained money (More information about the J.K. Publications case, from FTC.gov).

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