The marketers of a debit and credit card processing services operation have agreed to judgments of more than $26 million to settle Federal Trade Commission charges that they deceived small businesses throughout the country.

According to the FTC, the defendants' operation falsely promised that it would save merchants hundreds to thousands of dollars a year in processing fees by offering lower rates than the merchants' current credit card processing service.

The company was also accused of falsely representing that it would buy out merchants' equipment leases if the merchants accepted the offer, failing to disclose fees, and concealing pages of fine print until after merchants had signed contracts.

The defendants, all based in Oregon, are Aaron Lee Rian, Karely McCarthy aka Karly Speelman, Merchant Processing, Inc. (MPI), Direct Merchant Processing, Inc., Vequity Financial Group, Inc., and PPI Services, Inc. Rian and McCarthy signed separate settlements, and the four corporate defendants signed a third settlement.

Merchant Processing, Inc., founded and owned by Rian, was put under the control of a court-appointed receiver in April 2007. In October 2007, the FTC filed an amended complaint alleging that Rian and McCarthy had opened a new business, PPI Services, Inc., and were continuing to commit the same violations. PPI Services, Inc. was then turned over to the receiver.

Both businesses are now being operated lawfully by the receiver, and will be sold to fund payments to merchants who were injured by the scheme. The other two corporate defendants that have settled are Direct Merchant Processing, Inc. and Vequity Financial Group, Inc., both defunct corporations.

The settlements with all of the defendants include judgments of $26,480,041, which will be suspended upon completion of certain events, including transfer of Rian's real property and his interests in the corporate defendants to the receiver, transfer of McCarthy's interest in PPI Services, Inc. to the receiver, sale of the real property and the corporate defendants by the receiver, and payment of the proceeds by the receiver to the FTC for consumer restitution.

Under the settlements, Rian and McCarthy are banned from marketing card processing goods or services for sale or lease. In connection with any product or service, all of the defendants are prohibited from misrepresenting the savings that buyers will receive, that existing leases or contracts will be bought out if a purchase is made, or any material fact relating to the product or service or fees or rates charged.

In connection with representing that a particular rate or fee will be charged, the defendants must disclose clearly and conspicuously all material facts, such as the amounts of discount rates, processing surcharges, and cancellation fees.

The settlements prohibit the defendants from altering or adding to documents that consumers have signed without first obtaining their consent, concealing or failing to disclose clearly and conspicuously any terms of a contract, and failing to give consumers a complete copy of any document they sign when it is signed.

In addition, they cannot sell, rent, or otherwise disclose personal information about anyone who paid them money before the orders are entered.

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