A payment processing company that helped conduct a credit card interest rate reduction scam that bilked tens of thousands of consumers out of a total of nearly $10 million has agreed to give up $1.1 million to settle Federal Trade Commission charges.
The FTC had alleged that Independant Resources Network Corp., doing business as IRN Payment Systems (IRN), violated the Telemarketing Sales Rule (TSR) through its involvement in a credit card interest rate reduction scam that bilked tens of thousands of consumers out of a total of nearly $10 million.
IRN agreed to a settlement of $3.48 million, which is suspended upon payment of $400,000. IRN also released any claim to approximately $700,000 in reserve funds that the court previously ordered it to turn over under the asset freeze provisions of a preliminary injunction order that was entered before IRN was named as a defendant in the case.
In January 2013, the FTC filed a complaint to stop a telemarketing scam operated by Innovative Wealth Builders, Inc. (IWB), which it said falsely promised consumers that they could reduce the interest rates on their credit cards and save them thousands of dollars on their debts. For most of the time that IWB operated its scam, IRN was its exclusive payment processor.
In June 2013, the FTC sued IRN in an amended complaint alleging that IRN facilitated IWB’s scheme when IRN knew, or consciously avoided knowing, key facts about the illegal conduct of IWB’s telemarketing scam in violation of the TSR, and chose to continue profiting from processing IWB’s credit card transactions.
Payment processors enable merchants to charge consumers’ credit cards for products and services, and in exchange are paid for each payment transaction the merchant processes.