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Your Money Access (YMA), a US payments processing service provider,
has found itself in an unenviable position following the filing of
a lawsuit against it by the US Federal Trade Commission (FTC) and
the attorneys general of Illinois, Iowa, Nevada, North Carolina,
North Dakota, Ohio and Vermont. In a statement, the FTC and the
attorneys general said they had charged YMA with violating federal
and state laws by debiting or attempting to debit consumers’ bank
accounts on behalf of numerous fraudulent telemarketers and
internet-based merchants.
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The complainants explained that the merchants designed schemes to
extract money from consumers’ bank accounts by inducing them,
through misrepresentations and omissions related to marketing of
products or services, to provide the merchant with the consumer’s
personal bank account information. The merchants then transmitted
the bank account information to YMA, which processed debits to the
consumers’ bank accounts.
Between June 2004 and March 2006, the complainants allege, YMA
processed more than $200 million in debits and attempted debits to
consumers’ bank accounts; more than $69 million of the attempted
debits were returned or rejected by consumers or their banks for
various reasons, “indicating the lack of consumer authorisation”,
the complainants allege. In addition, allege the complainants, in
many instances after YMA debited accounts merchants failed to
deliver the promised products or services, or sent consumers
relatively worthless items.
The complainants also allege that YMA accepted clients whose
applications contained signs of deceptive activity, including sales
scripts with statements that were facially false or highly likely
to be false, and anticipated that many of its clients would
generate high rates of returned or reversed transactions, a sign
that unauthorised debits from consumers’ accounts were likely.
Return rates were as high as 80 percent.
“The defendants purportedly saw extremely high return rates and
looked the other way,” said the director of the FTC’s Bureau of
Consumer Protection, Lydia Parnes.” We allege that consumers lost
millions of dollars as a result, and that the company’s conduct
violated federal and state laws.”
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By GlobalData
