The former president of a payment processing company has agreed to settle charges brought by the Federal Trade Commission (FTC) and seven states for his role in an operation that allegedly debited more than $200 million in bogus charges from consumers' bank accounts.
Derrelle Janey was president of Your Money Access, LLC from 2003 to 2006. According to a 2007 complaint filed by the FTC and the states of Illinois, Iowa, Nevada, North Carolina, North Dakota, Ohio and Vermont, the company processed unauthorized debits on behalf of deceptive telemarketers and Internet-based schemes that were violating the FTC's Telemarketing Sales Rule and state and federal consumer protection laws.
Banking system access
According to the complaint, the company played a critical role in helping many of its clients carry out these schemes by providing access to the banking system and the means to extract money from consumers' bank accounts. Between June 23, 2004, and March 31, 2006, Your Money Access processed more than $200 million in debits and attempted debits.
More than $69 million of the attempted debits were returned or rejected by consumers or their banks for various reasons, an indication that in many cases consumers had never authorized the charges. In many instances, the merchants either failed to deliver the promised products or services or sent consumers relatively worthless items.
Janey is a defendant in the complaint along with YMA, YMA Company, LLC, and Tarzenea Dixon, former CEO of YMA. He is the fourth and final defendant to reach a settlement with the FTC and attorneys general. Default judgments were previously reached against YMA and YMA Company. Dixon also reached a prior settlement.
"These defendants were part of a scheme to deceive consumers and take their money," said Illinois Attorney General Lisa Madigan. "They processed charges that consumers often never authorized, and the products and services peddled by these telemarketers often turned out to be bogus."
YMA's clients -- telemarketers -- peddled government grant information, identity theft protection and prescription discount plans. Telemarketers placed cold calls offering consumers these products that were of questionable value and reliability, solicited their bank account information and passed on the information to the defendant to complete the debit. In many cases, consumers were not aware they had made a purchase until the charge showed up on their bank statement.
Under the settlement, Janey agreed never to participate in the processing of payments debited from consumer bank accounts or knowingly aid anyone who is violating the Telemarketing Sales Rule. The order imposed a $625,000 judgment against Janey, but due to his financial state he is required to pay only $15,000, which will go to the U.S. Treasury. The court suspended the remainder due to Janey's financial dire straits. The court can lift this suspension if it finds that Janey lied about his current financial situation.