Allied Wallet settles $110m charge from the US Federal Trade Commission

Payment processor Allied Wallet has settled the $110m charge against the company which had been filed by the US’ Federal Trade Commission (FTC).

The $110m charge was made to Allied Wallet CEO and owner Ahmad Khawaja, who also turned over a property in Los Angeles.

The charges were initially made on the basis Allied Wallet had assisted several scams by knowingly processing fraudulent transactions to consumers’ accounts.

Its accusation claims the company processed payments for merchants engaged in fraud, which includes merchants embroiled in enforcement action by the FTC and the SEC. These include phantom debt collection company Stark Law, pyramid scheme TelexFree and MOBE and Digital Altitude, both of which are coaching schemes which defrauded consumers with claims they would increase their income.

Allegedly, Allied Wallet had helped multiple suspicious merchants hide their fraud from banks and the credit card networks. Its deceptive practices included creating fake foreign shell companies to open accounts in their names, submitting dummy websites and other false information to merchant banks, as well as actively evading card network rules and anti-fraud processes, the regulator said.

In addition to the fine, Allied Wallet will be banned from processing payments of certain merchant types, including sellers and marketers of money-making opportunities, it said. The payment processor must also enforce strict screening and vetting processes for all merchants.

The order imposed a $320,429 equitable monetary fine to Allied Wallet VP of Operations Rountree, which was suspended due to an inability to pay, the FTC said.

Following the action taken by the FTC, the UK’s Financial Conduct Authority has initiated its investigation into Allied Wallet.

Allied Wallet is a payment processor which helps companies to integrate tools to accept payments.

Enjoyed the story? 

Subscribe to our weekly RegTech newsletter and get the latest industry news & research

Copyright © 2018 RegTech Analyst


The following investor(s) were tagged in this article.