New Beginnings NY Inc. and its owner Kenneth Newton will pay $71,640 in restitution as part of a settlement reached with Attorney General Eric T. Schneiderman on Tuesday.
The money will go to customers who allegedly paid for, but never received, identity theft protection from Phoenix Trust, which served as the payment processor for New Beginnings.
“Mr. Newton allowed scam artists to prey upon innocent consumers who were, in fact, trying to ensure their financial security, violating their trust and taking their hard-earned money,” Schneiderman said. “This settlement sends the clear message that businesses that process payments for scam artists will be held accountable.”
Newton operated New Beginnings as a payment processing company, which would electronically withdraw payments from customer bank accounts and deposit them into another account as payment for services or goods.
Newton provided these services to Phoenix Trust from June 26, 2013, to July 11, 2013. It was his understanding that Phoenix Trust was selling identity theft protection for $398 to consumers. Phoenix Trust allegedly failed, however, to provide identity theft protection and consumers received nothing in return for the $398 deducted from their accounts.
The settlement will provide complete reimbursement to defrauded consumers. Newton is also required to shut down New Beginnings and his other company Ironwood Management Group, which collected on consumer debt.