FTC Sues Payment Co. For Role In Web Scam
Try to access the website of payment service InterBill and you'll get a white-screen notice that the site is "under construction." We can, for lack other information, assume it has nothing to do with the Federal Trade Commission filing suit over the company's affiliation with a major scam.
Back in 2004, about 90,000 people were hit for $139 each after scam outfit PharmacyCards.com debited their accounts without their knowledge or permission.
Lucky recipients of the bogus discount cards for Target and Wal-Mart (neither of which had partnerships) learned by email that their accounts were debited. Canadian phone numbers and mailing addresses led nowhere. Consumers were fleeced for $2.3 million. If 70 banks hadn't refused the transactions, $10 million would have been lost.
InterBill is the payment processor PharmacyCards.com used to do it, and the FTC isn't letting them off the hook. The regulatory agency is accusing InterBill of debiting "thousands of consumers' accounts despite indications that the operation was bogus." Further, the FTC alleges that consumers had no contact with InterBill or PharmacyCards before money was taken from their checking accounts.
InterBill is named in the suit because the FTC says the company did not follow its own guidelines for new merchants before accepting the scammers as clients, like conducting background checks or verifying a physical address.
Using a London-based mail drop as an address, a phone number to a Quebec call center, a fake address in British Columbia, pre-paid, nearly untraceable cell phones to conduct business, anonymous email and fax accounts, the identity of a Cyprus-based corporation, and a Cyprus bank account, PharmacyCards conducted this scam.
The FTC alleges that InterBill "anticipated high rates of returned or reversed transactions, a sign that unauthorized debits from consumers' accounts were likely." InterBill did not request or obtain proof that consumers had authorized PharmacyCards to debit their accounts, the FTC says.
Also, despite skyrocketing return rates, complaints from consumers and banks, and unsuccessfully getting sufficient answers PharmacyCards, InterBill continued to process payments.
Tag: InterBill
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