The Federal Trade Commission (FTC) reached a $12 million settlement with Humboldt to resolve allegations regarding the processing of payments for fraudulent merchants. The agency claimed that Humboldt facilitated transactions for over 1,000 shell entities that operated as fronts for unauthorized billing scams between 2021 and 2023.
According to the FTC, Humboldt processed payments for accounts with chargeback rates nearly 10 times higher than industry thresholds. The complaint further alleged that the company attempted to bypass risk monitoring by routing transactions through lower-risk bank identification numbers associated with an affiliate.
Under the terms of the settlement, Humboldt must pay $12 million for consumer redress. The company is now prohibited from processing payments for high-risk merchants, including those on the Mastercard MATCH list, entities using third-party mailbox providers, or businesses involved in credit card laundering.
Humboldt stated that the issues involved a limited number of third-party agents under former leadership. The company noted that it has since enhanced its compliance and risk management programs, cooperated with the FTC investigation, and made no admissions of wrongdoing regarding the allegations.
