FTC Sends More Than $2.6 Million in Refunds to Small Businesses Harmed by Payment Processor First American Payment Systems

News Consumer protection Sanctions & Fines

Date: 6th Feb, 2025 Source: Federal Trade Commission Country: USA Original Source

Brief

"The Federal Trade Commission issued an update regarding FTC Sends More Than $2.6 Million in Refunds to Small Businesses Harmed by Payment Processor First American Payment Systems". The FTC is sending checks and claim forms to small businesses affected by First American's allegedly misleading practices, with a deadline to submit claims on May 7, 2025, for early termination fees.

Tags:

Consumer Protection
Bureau of Consumer Protection
consumer refunds
Small Business

The Federal Trade Commission is sending more than $2.6 million in refunds to small businesses harmed by payment processor First American Payment Systems.The FTC filed a lawsuit in July 2022 against First American, charging the company with trapping small businesses with hidden terms, surprise exit fees, and zombie charges. The FTC alleged the company made false claims about fees and cost savings to lure merchants. Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent and made it difficult and expensive for them to cancel the service. The defendants settled the lawsuit with the FTC by paying money to refund small businesses. They also agreed to stop misleading businesses about their fees and make it easier for businesses to cancel their services.The FTC is sending checks to 5,588 small businesses. Recipients should cash their checks within 90 days, as indicated on the check.The agency is also mailing claim forms to 16,181 businesses who enrolled with First American Payment Systems between June 2017 and April 2020 and later canceled their enrollment. Businesses who were charged an early termination fee may apply for a refund. The deadline to submit a claim is May 7, 2025.More information about this refund and claims process is available at ftc.gov/FirstAmerican or by calling the refund administrator, JND Legal Administration, 877-595-0114. The Commission never requires people to pay money or provide account information to get a refund.The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2024, FTC actions led to $285 million in refunds to consumers across the country.

The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.

Contact Information

Contact for Consumers

JND Legal Administration

877-595-0114

Media Contact

Office of Public Affairs

202-326-2180

Highlights content goes here...

Purpose:
The Federal Trade Commission (FTC) is sending over $2.6 million in refunds to small businesses that were harmed by payment processor First American Payment Systems. This refund is a result of the FTC’s lawsuit filed against First American in July 2022, which alleged that the company engaged in deceptive business practices.

Effects on Industry:
The settlement between the FTC and First American will have significant effects on the payment processing industry. It highlights the importance of transparency and fairness in business dealings, particularly for small businesses. The settlement also serves as a warning to other companies that engage in similar deceptive practices, encouraging them to adopt more ethical business practices.

Relevant Stakeholders:
The stakeholders affected by this update include 5,588 small businesses who will receive checks from the FTC, and 16,181 businesses who enrolled with First American Payment Systems between June 2017 and April 2020 and later canceled their enrollment. These businesses may be eligible for a refund if they were charged an early termination fee.

Next Steps:
Small businesses that received checks should cash them within 90 days, as indicated on the check. Businesses who are eligible for a refund but did not receive a claim form can obtain one by contacting the refund administrator, JND Legal Administration, at 877-595-0114. The deadline to submit a claim is May 7, 2025.

Any Other Relevant Information:
This settlement demonstrates the FTC’s commitment to protecting consumers and promoting competition in the marketplace. It also highlights the importance of reporting fraud, scams, and bad business practices to the FTC. Consumers can report such incidents at ReportFraud.ftc.gov or by contacting the FTC directly. The FTC will continue to work towards promoting fair and transparent business practices across various industries.

Federal Trade Commission

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FTC Sends More Than $2.6 Million in Refunds to Small Businesses Harmed by Payment Processor First American Payment Systems

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FTC Sends More Than $2.6 Million in Refunds to Small Businesses Harmed by Payment Processor First American Payment Systems

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