FTC Orders Payment Processor Nuvei to Pay $4.85 Million for Facilitating Merchant Fraud

Global payment processor Nuvei will pay 4.85 million USD to settle Federal Trade Commission charges that it facilitated merchant fraud. The Federal Trade Commission alleged Nuvei opened and maintained payment processing accounts for merchants it knew or should have known were engaged in deception, including tech support scams that took millions of dollars from consumers. This settlement requires Nuvei to implement robust merchant screening practices.

The Federal Trade Commission (FTC) filed a complaint against Nuvei Corporation and its subsidiaries, including Nuvei International Group Limited, Nuvei Limited, SafeCharge Digital Limited, and Nuvei Technologies Inc. The complaint charges Nuvei and its operators with unfair practices in connection with payment processing, violating the FTC Act, and assisting and facilitating deceptive telemarketers, violating the Telemarketing Sales Rule. The FTC alleged Nuvei processed over 30 million USD in consumer payments for Reimage, an offshore tech support scam, from 2017 to 2023. Nuvei also allegedly furnished Reimage and other overseas deceptive tech support schemes with payment processing accounts, enabling them to take credit card payments from cardholders in the United States and elsewhere. Nuvei's U.S. based subsidiary, Nuvei Technologies Inc., also opened and maintained merchant accounts for merchants allegedly selling business opportunities with false or baseless earnings claims, merchants impersonating government tax authorities, and merchants other payment processors or acquiring banks previously terminated for excessive chargebacks or fraud.

Under the proposed order, Nuvei will pay 4.85 million USD for consumer redress. The order prohibits Nuvei from making false or misleading statements to obtain merchant accounts and other payment processing services for itself or others. It also bans engaging in tactics to avoid fraud or risk monitoring programmes established by banks or credit card networks, including load balancing. Nuvei must screen and monitor its existing and prospective clients, including those in certain merchant categories such as outbound telemarketing, and conduct enhanced screening and investigation of any existing client whose chargeback rates exceed the limits set forth in the order. Furthermore, the order bans Nuvei from providing payment services to any person selling tech support products or services by telemarketing or by pop up messages relating to security or performance issues on a computer or other device.

The recurring challenge of payment processors inadvertently or knowingly facilitating fraudulent schemes continues to attract regulatory scrutiny, as evidenced by the Federal Trade Commission's action against Nuvei.