Feds, seven states settle debit charges suit

By Nick Rees | Mar 1, 2010


RALEIGH, N.C. (Legal Newsline) - North Carolina consumers will receive $1.8 million in refunds from a processor who allegedly aided phony merchants in debiting consumers' bank accounts, North Carolina Attorney General Roy Cooper has announced.

The refunds stem from a lawsuit filed by the Federal Trade Commission, North Carolina and six other states - Illinois, Iowa, Nevada, North Dakota, Ohio and Vermont - against Your Money Access in Dec. 2007. Your Money Access is a payment processor based in Florida that was alleged to have helped or tried to help phony telemarketers in debiting over $200 million from consumers' bank accounts.

"Businesses shouldn't turn a blind eye to fraud so they can make money off victims," Cooper said. "People get swindled by smooth-talking telemarketers, but this won't work without the payment processor's help."

The settlement resulting from the lawsuit bans Your Money Access CEO Tarzenea Dixon from payment processing and aiding fraudulent telemarketers. The settlement also includes a $22 million judgment against Dixon.

Wachovia Bank, under an agreement with the Office of the Comptroller of Currency, has already issued more than $150 million in refunds to consumers' accounts that were unlawfully debited.

The settlement comes as a result of an alleged scam that saw fake merchants calling consumers pretending to sell a product of service. When consumers would give their bank account information to complete the purchase, the information was sent to Your Money Access to remove money from the consumers' accounts, Cooper said.

After the money was debited, the sellers then failed to deliver the purchases or sent worthless goods that the consumers hadn't ordered, Cooper said.

Your Money Access was alleged to have played a critical role in the scam. The company was also alleged to have known that the merchants it dealt with were deceiving consumers.

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