Facts

The Federal Trade Commission brought an action against Qualpay, Inc., an independent sales organization that helps merchants obtain payment processing services in order to charge consumers' credit cards, in relation to its business with a fraudulent business coaching and investment venture called My Online Business Education.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that MOBE defrauded more than tens of thousands of consumers for over $300 million by claiming to offer a simple system that consumers could use to start an online marketing business and generate income, but in actuality, consumers that purchased the products suffered extreme financial losses.

Plaintiff contended that defendant helped MOBE open and maintain merchant accounts and ignored clear warning signs that MOBE was undertaking an illegal scheme. Plaintiff contended that MOBE engaged in excessive charge backs and that defendant failed to monitor the products MOBE was selling and the claims MOBE was making to sell those products. Plaintiffs also contended that defendant did not follow its own internal policies and failed to closely review MOBE's business practices.

DEFENDANT'S CONTENTIONS: Defendant denied the contentions and contended that it was unaware of the alleged violations claimed by plaintiff because defendant was not involved in its clients business operations.

Result

A monetary judgment of $46,779,358.91 was imposed under the parties' settlement agreement, but payment of the settlement amount was suspended due to defendant's inability to pay. Additionally, defendant was prohibited from processing payments in the coaching business under the agreement.

Other Information

JUDGE: Comm. Rebecca Kelly Slaughter.