The Federal and Trade Commission has taken action against BlueSnap, a payment processing platform. Ralph Dangelmaier (its former CEO) and Terry Monteith (senior vice president) are charged with knowingly processing payments for deceptive and fraudulent companies. The defendants have agreed to a settlement by turning over USD 10 million for consumers and abstaining from processing payments for high-risk clients.

The FTC asserted that BlueSnap and its officers continued to process millions of dollars in credit card payments for ACRO Services despite having substantial evidence that the company was fraudulent. The FTC sued ACRO Services in November 2022 for defrauding consumers between 2019 to 2021.

According to a federal court complaint, BlueSnap had also processed payments for other companies accused of fraud, including Powerline Group, which the New York Attorney General is targeting in a law enforcement action.

Analyst QuickTake: Multiple FinTech infrastructure companies have been under legal scrutiny over compliance breaches. This includes 1) Veriff, which settled a class action lawsuit for USD 4 million in February 2023 over failure to comply with the Biometric Information Privacy Act (BIPA) when collecting facial geometry scans for identity verification, and 2) Plaid, which settled a class action lawsuit for USD 58 million in August 2021 over claims that the company used banking login credentials to share data with third-party firms without prior consent.