From Lexology, ““Credit card laundering” or “factoring” refers to the practice of processing credit card transactions for one company through the merchant processing account of another company. In recent years, the FTC has sued several companies for engaging in this practice or assisting allegedly fraudulent merchants to launder card payments through multiple processing accounts. On July 28, 2017, the FTC filed a complaintagainst an ISO called Electronic Payment Systems, LLC (EPS), its own ISOs and sales agent companies, and certain of its officers and sales agents in their individual capacities. The complaint serves as a strong reminder that, whatever else has changed in Washington, the FTC continues to pursue fraudulent merchants and those that assist them in getting access to the payments system.
The FTC’s complaint alleges that EPS approved 23 merchant account applications for a deceptive telemarketing scam called Money Now Funding, which the FTC sued in 2013. “