FTC says Humboldt Merchant Services to pay $12 million in payment-processing case

By Atlas Watchline Staff · Enforcement · September 8, 2026

The FTC says Humboldt Merchant Services will pay $12 million and face a permanent ban on processing payments for certain higher-risk merchants to settle claims it helped funnel money for sham companies tied to consumer fraud.

The FTC says Humboldt Merchant Services will pay $12 million and face a permanent ban on processing payments for certain higher-risk merchants to settle claims it helped funnel money for sham companies tied to consumer fraud.

The Federal Trade Commission said Humboldt Merchant Services agreed to a proposed order that would require the payment processor to pay $12 million and bar it from processing payments for merchants with a heightened risk of fraud. The agency filed the proposed order in U.S. District Court for the Eastern District of Michigan.

In its complaint, the FTC said Humboldt processed payments for more than 1,000 merchants that were shell entities acting as fronts or pass-throughs for fraudulent companies involved in unauthorized billing scams.

The FTC named Legion Media as one of the fraudulent companies in the case and said the agency shut it down in 2024. The commission said its vote to approve filing the proposed order was 2-0.

According to the FTC, the proposed order would permanently prohibit Humboldt from processing payments for merchants the agency views as carrying a heightened risk of potential fraud. The FTC said stipulated final orders or injunctions have the force of law when approved and signed by the district court judge.

Katherine White, deputy director of the FTC’s Bureau of Consumer Protection, said Humboldt processed payments despite red flags indicating consumer scams.

White said the case shows the FTC’s commitment to holding companies accountable for knowingly supporting fraudulent businesses.

The FTC said the proposed order has been filed, and it would take effect if approved and signed by the district court judge.

Sources

• FTC press release: FTC takes action against payment processor Humboldt Merchant Services

Editorial note: This article was prepared with AI assistance and includes source attribution for reader review.

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