The Federal Trade Commission (FTC) has reached a settlement with Humboldt Merchant Services, a payment processing company, which will pay $12 million and face a permanent ban on processing payments for certain high-risk merchants. This action comes after allegations that Humboldt knowingly facilitated payment processing for over 1,000 fraudulent merchants, including shell companies involved in unauthorized billing scams.

According to the FTC's complaint, Humboldt processed payments for merchants that were essentially fronts for fraudulent activities, despite clear warning signs. The company was accused of ignoring red flags and processing payments for entities that had chargeback rates significantly higher than acceptable levels.

The settlement prohibits Humboldt from engaging in credit card laundering and processing payments for specific categories of merchants, including those on the Mastercard Alert to Control High-Risk (MATCH) list and those involved in deceptive practices. The FTC emphasized its commitment to holding companies accountable for supporting fraudulent businesses.