UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF TEXAS 

FEDERAL TRADE COMMISSION, 

 Plaintiff, 

 v. 

FIRST AMERICAN PAYMENT SYSTEMS, LP, 

a limited partnership, also d/b/a MERIMAC 

CAPITAL, 

ELIOT MANAGEMENT GROUP, LLC, a 

limited liability company, also d/b/a SUNDANCE 

PAYMENT SOLUTIONS, and 

THINK POINT FINANCIAL, LLC, a limited 

liability company, also d/b/a CYPRESS BAY 

SOLUTIONS and IMPULSE PAYMENTS, 

 

 Defendants. 

Case No. ____________ 

COMPLAINT FOR PERMANENT 

INJUNCTION, MONETARY 

RELIEF AND OTHER RELIEF

 Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges: 

The FTC brings this action under Sections 13(b) and 19 of the Federal Trade Commission Act 

(“FTC Act”), 15 U.S.C. §§ 53(b), 57b, and the Restore Online Shoppers’ Confidence Act 

(“ROSCA”), 15 U.S.C. § 8404, which authorize the FTC to seek, and the Court to order, 

permanent injunctive relief, monetary relief, and other relief for Defendants’ acts or practices in 

violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and Section 4 of ROSCA, 15 U.S.C. 

§ 8403. 

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SUMMARY OF CASE

1. Defendant First American Payment Systems, LP (“First American”) provides 

payment processing services, which it markets to small businesses throughout the United States 

through its sales agents, including Defendants Eliot Management Group, LP and Think Point 

Financial, LP. These agents contact these consumers to pitch First American’s services. During 

these sales presentations, Defendants, through their sales agents, pitch consumers with false and 

baseless claims about their processing services to convince consumers to enroll. For example, 

Defendants often misrepresent that the total monthly fees for payment processing services will 

not exceed certain amounts and make unsubstantiated claims that consumers will save a 

significant amount of money by switching to Defendants’ payment processing services. 

Defendants also often represent that consumers may cancel at any time without penalty, may 

cancel within an introductory trial period without penalty, or are merely bound to a short-term 

agreement. In fact, Defendants’ standard agreement for services binds consumers to a three-year 

agreement with a $495.00 early termination fee. These representations violate Section 5(a) of the 

FTC Act, 15 U.S.C. § 45(a). 

2. Defendants debit consumers’ bank accounts for a variety of fees, and deposit 

processing proceeds into those accounts. When consumers dispute debts, instruct Defendants not 

to debit their accounts, or stop payment through their financial institutions, Defendants, through 

First American’s collection department, nevertheless routinely attempt to debit consumers’ bank 

accounts electronically for the claimed debts. First American’s collection department attempts to 

evade stop-payment efforts by debiting different bank accounts or changing company names 

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associated with the debits. Defendants’ unauthorized ACH practices are unfair in violation of 

Section 5 of the FTC Act. 

3. Defendants enroll consumers who are convinced by their sales pitch primarily 

through a proprietary web portal known as “FirstOnBoard.” Defendants’ payment processing 

agreements renew automatically for another one-year term if consumers do not cancel, and 

therefore are “negative options” governed by Section 8403 of ROSCA, 15 U.S.C. § 8403, which 

requires clear and conspicuous disclosure of material terms before charging consumers. 

Although Defendants control the web-based platform, its appearance, and the terms that are 

shown to consumers on it, they nevertheless have failed to disclose, clearly and conspicuously, 

key terms of their agreements, including the length of the agreement, early termination fee, the 

automatic renewal feature, and the cancellation requirements. Defendants have violated ROSCA 

by failing to disclose these material terms, by charging consumers without their express informed 

consent, and by failing to provide a simple mechanism for consumers to cancel the agreements. 

4. Defendants’ deceptive and unfair practices have likely resulted in millions of 

dollars of consumer injury. 

JURISDICTION AND VENUE 

5. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), 

and 1345. 

6. Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), (c)(2), and 

(d), and 15 U.S.C. § 53(b). 

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PLAINTIFF

7. The FTC is an independent agency of the United States Government created by 

the FTC Act, which authorizes the FTC to commence this district court civil action by its own 

attorneys. 15 U.S.C. §§ 41–58. The FTC enforces Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. 

The FTC also enforces ROSCA, 15 U.S.C. §§ 8401-8405. ROSCA prohibits the sale of goods or 

services on the Internet through negative option marketing without meeting certain requirements 

for disclosure, consent, and cancellation to protect consumers. A negative option is an offer in 

which the seller treats a consumer’s silence—i.e., their failure to reject an offer or cancel an 

agreement—as consent to be charged for good and services. 16 C.F.R. § 310.2(w). 

DEFENDANTS 

8. Defendant First American Payment Systems, LP, also doing business as Merimac 

Capital, is a Texas limited partnership with its principal place of business at 100 Throckmorton, 

Suite 1800, Fort Worth, Texas 76102. First American transacts or has transacted business in this 

District and throughout the United States. At all times relevant to this Complaint, acting alone or 

in concert with others, First American has advertised, marketed, or sold payment processing 

services to consumers throughout the United States. 

9. Defendant Eliot Management Group, LLC (“EMG”), also doing business as 

Sundance Payment Solutions, is a Utah limited liability company with its principal place of 

business at 100 Throckmorton Street, Suite 200, Fort Worth, Texas 76102. EMG transacts or has 

transacted business in this District and throughout the United States. At all times relevant to this 

Complaint, acting alone or in concert with others, EMG has advertised, marketed, or sold 

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payment processing services to consumers throughout the United States. EMG is a whollyowned subsidiary of First American that operates as a sales entity solely to market First 

American’s services. 

10. Defendant Think Point Financial, LLC (“Think Point”), also doing business as 

Cypress Bay Solutions and Impulse Payment, is a Delaware limited liability company with its 

principal place of business at 5625 West Spring Creek Parkway, Plano, Texas 75024. Think 

Point transacts or has transacted business in this District and throughout the United States. At all 

times relevant to this Complaint, acting alone or in concert with others, Think Point has 

advertised, marketed, or sold payment processing services to consumers throughout the United 

States. Think Point has common corporate ownership with First American and operates solely as 

a sales entity for First American. 

COMMON ENTERPRISE 

11. Defendants First American, EMG, and Think Point have operated as a common 

enterprise while engaging in the deceptive, unfair, and unlawful acts and practices and other 

violations of law alleged below. Defendants have conducted the business practices described 

below through an interrelated network of companies that have common ownership, common 

officers, common office locations and use common services such as utilities, Internet service 

providers, and software licenses. Because Defendants have operated as a common enterprise, 

each of them is liable for the acts and practices alleged below. 

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COMMERCE

12. At all times relevant to this Complaint, Defendants have maintained a substantial 

course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 

15 U.S.C. § 44. 

DEFENDANTS’ BUSINESS ACTIVITIES 

13. First American markets and provides payment processing services, including 

debit, credit, and check processing and related services, to consumers throughout the United 

States. These consumers need a convenient and easy way to take payments from their customers, 

and rely on payment processing companies to establish debit, credit, and check processing 

services. Many of the consumers to whom First American markets its services are small 

businesses—including sole proprietorships—such as restaurants, nail salons, or small retail 

businesses. First American markets its services throughout the country through a variety of 

strategies, including the use of Defendants EMG and Think Point as well as unaffiliated 

independent sales organizations (“ISOs”). EMG, Think Point, and the ISOs use their own 

directly employed or contracted sales representatives (collectively “sales agents”) to market First 

American’s services.

14. Defendants, through sales agents, solicit consumers through a variety of methods 

including by telephone, email, and other remote means. Following the initial contact, sales 

agents often make a presentation to consumers, either in person or remotely, in an effort to obtain 

consumers’ agreement to use Defendants’ services. In recent years, remote means of contact 

have become more common.

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15. Defendants exert influence and control over contracted sales agents who solicit 

consumers on their behalf. Defendants EMG and Think Point recruit, train and provides sales 

leads and closing assistance to their contracted sales agents and have the contractual right to 

terminate them without cause. First American’s contracts with many of its ISOs give it the right 

to terminate the contract without cause and exclude specific sales agents. 

16. Regardless of sales channel, First American handles the actual payment 

processing for consumers, including crediting consumers for payments and debiting Defendants’ 

fees from consumers’ bank accounts. First American provides customer service for all sales 

channels. Its collection department also pursues consumers for claimed collection balances.

Deception during the sales process

17. Defendants’ sales agents use a variety of tactics to convince consumers to switch 

from their existing payment processors, including by offering purportedly lower prices for 

payment processing services. Defendants’ typical pricing structure includes monthly fees that 

consumers will pay regardless of processing volume as well as “discount rates”—percentagebased fees that are assessed for each transaction. 

18. In numerous instances, Defendants’ sales agents represent to consumers that their 

total monthly fees other than transaction-based fees would not exceed a certain amount per 

month. For example, sales agents have represented to consumers that their total monthly fees 

would be $20.00, $17.00, $15.90, $12.00, or other similarly low amounts, or even zero. 

Defendants charged the vast majority of consumers in these sales channels more than these 

amounts. 

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19. Defendants’ sales agents also make savings projections to convince consumers to 

switch from their current providers. Sales agents’ methods for calculating this purported savings 

vary. Some sales agents use a software known as “Clientvine” to generate savings projections. 

Agents input certain information about a consumer’s existing processing profile—such as the 

type of business, processing volume, and “high ticket” (maximum per-transaction amount a 

merchant is likely to submit for processing)—as well as the new pricing structure selected by the 

representative for the consumer. The program then generates a display of projected monthly and 

annual savings, which sales agents can show or verbally convey to consumers as part of the sales 

presentation. Alternatively, some sales agents rely on their supposed personal knowledge of the 

industry to calculate purported savings based on their comparison of a consumer’s current costs 

for various cards to the costs they would pay under the proposed new structure, along with a 

comparison of other applicable monthly fees and costs. 

20. Defendants’ sales agents’ savings projections are flawed. Defendants’ annual 

savings claims do not account for the fact that First American typically raises its rates for 

merchants—including its percentage markups for merchants on cost-plus pricing—at least once a 

year and sometimes twice a year. Whether the sales agents use a direct-comparison method, 

Clientvine, or other methods, Defendants’ annual savings claims assume that rates will stay 

constant. Clientvine’s display does not qualify its annual savings projection and does not disclose 

to consumers that their rates will almost always increase during the term of the agreement. Nor 

do Defendants’ sales agents verbally inform consumers that the annual savings is likely to be 

affected by rate changes. Additionally, some sales agents incorporate inaccurate low monthly 

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fees as part of their calculation, resulting in inaccurate monthly as well as annual savings 

projections. 

21. When verbally pitching Defendants’ services to consumers, in many instances, 

Defendants’ sales agents misrepresent the conditions under which merchants can cancel services 

without penalty. First American’s standard agreement for services, titled “Merchant Application 

& Agreement” (the “Agreement”), which consumers who enroll electronically are not required to 

read and may never see, obligates merchants to a three-year term with a $495.00 early 

termination fee. Sales agents often promise consumers that they can cancel at any time without 

penalty, or that they can cancel without penalty within an introductory trial period such as 30 

days. Sales agents sometimes represent to consumers that they are bound for only a short time 

period, such as one year. Sales agents have the ability to alter the standard agreement, but in 

many instances have made these representations without altering the agreement. Many of the 

small business owners solicited by Defendants’ sales agents have limited English proficiency. 

Defendants’ oral presentations to these consumers often are made in their native languages, 

including Spanish, Vietnamese and Amharic, but the written agreements are in English with no 

accompanying translations.

22. In numerous other instances, sales agents do not disclose certain key details of 

First American’s standard agreement for services, including the term of the agreement, the early 

termination fee, the autorenewal provision, or the cancellation requirements. In fact, some sales 

managers discourage representatives from getting into detailed discussions with consumers about 

the early termination fee and other provisions of the agreement and even take the position that it 

is to the sales representatives’ benefit not to understand the agreement, employing phrases like 

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“stay hungry, stay stupid.” Defendants’ sales agents also engage in tactics to distract or 

discourage consumers from reading these provisions in the agreement. As a result, many 

consumers believe that they can cancel the services at any time without penalty. 

23. Consumers frequently complain that they learned of the agreement term and early 

termination fee provisions only when they attempted to cancel Defendants’ services. Moreover, 

when consumers who were told that they could cancel without penalty contact First American to 

cancel, they are typically told they are subject to a binding agreement with a specified early 

termination fee if they cancel before the term has expired. First American’s collections 

department attempts to collect early termination fees, including by electronic debits of 

consumers’ bank accounts, even for consumers who were told that they could cancel without 

penalty.

24. Defendants’ standard agreement also provides that the agreement term will autorenew for additional one-year terms perpetually if consumers do not take affirmative steps to 

cancel the agreement within a short 60-day window that begins 90 days before the end of the 

agreement term, and that consumers must submit a written notice with an authorized signature. 

Defendants’ sales agents also typically do not discuss the autorenewal provision or cancellation 

requirements with consumers during the sales process. In many instances, consumers complain 

that they were unaware of the autorenewal and cancellation provisions and continue to be debited 

for monthly fees for months or even years after they have stopped using Defendants’ services.

25. Defendants have received numerous complaints about their sales agents 

misrepresenting pricing, savings, and cancellation for many years. 

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Online Enrollment

26. After Defendants’ sales agents solicit consumers with lengthy sales pitches, in 

many instances failing to disclose key terms of the processing services or misrepresenting them, 

they lead consumers through an online enrollment process through FirstOnBoard. Consumers 

must access and complete the process through an Internet connection. Through FirstOnBoard, 

Defendants require consumers to click an acknowledgment of the agreement and certain bulletpoint acknowledgments, but have not clearly and conspicuously disclosed several material terms. 

In particular, FirstOnBoard has failed to disclose adequately to consumers the agreement term, 

the early termination fee, the autorenewal provision, or the detailed cancellation requirements. 

27. Prior to April 2020 FirstOnBoard did not mention that consumers were bound to 

an agreement term with an early termination fee unless consumers clicked on hyperlinks that 

they were not required to access to execute the agreement. FirstOnBoard still does not disclose 

the autorenewal or cancellation provisions unless consumers click on optional hyperlinks to the 

Merchant Processing Terms and Conditions, a dense, single-spaced, fine-print document 

typically consisting of five pages and more than 20 numbered paragraphs. 

28. To generate an electronic agreement through FirstOnBoard, sales agents first fill 

in editable fields such as specific pricing arrangements and merchant identity information. The 

FirstOnBoard system then emails the consumer a link that grants access to a series of enrollment 

screens that the consumer uses to execute the agreement. Alternatively, if the sales agent is 

present with the consumer, the sales agent can present the enrollment screens on a computer or 

tablet. 

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29. Once the consumer accesses the enrollment screens, the system displays some of 

the editable information the sales agent has entered, including a summary of fees that will apply. 

The fee summary has never included the early termination fee. A typical variant of the fee 

summary page is shown in Screenshot 1, taken from a training video: 

Screenshot 1 

30. Next, the FirstOnBoard system displays a screen that includes a checkbox that 

the consumer must click to proceed with enrollment. Next to the checkbox is an 

acknowledgment that the consumer “agree[s] to the Terms and Conditions listed above.” 

However, the screen does not display the full agreement. Instead, it displays a bullet-point list 

Case 4:22-cv-00654 Document 1 Filed 07/29/22 Page 12 of 23 PageID #: 12

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summarizing certain provisions from the agreement. The screen includes hyperlinks to additional 

documents, but the consumer need not access them to proceed. Prior to April 2020, this summary 

included no reference to the contract term, early termination fee, auto-renewal provision or 

cancellation requirements. Screenshot 2 is an example of this summary:

Screenshot 2 

31. After the consumer clicks the checkbox on this screen, Defendants, through the 

FirstOnBoard system, next present a screen in which the consumer agrees to an individual 

guaranty imposing personal liability under the agreement. This screen has never contained 

references to the agreement term, early termination fee, autorenewal provision, or cancellation 

requirements. One variation is shown in Screenshot 3:

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Screenshot 3 

Some variations of the electronic process have also included acknowledgement screens related to 

payment for equipment or seasonal processing; none of these screens reference the agreement 

term, early termination fee, autorenewal, or cancellation provisions. 

32. Once the consumer has clicked through the acknowledgment screens, Defendants, 

through the FirstOnBoard system, present a screen with a final “accept” button. 

33. A consumer can complete the whole process and execute the agreement without 

ever viewing the auto-renewal and cancellation provisions, which consumers only access if they 

click on optional hyperlinks to the Merchant Application & Agreement and Merchant Processing 

Terms and Conditions or excerpts. 

34. Prior to April 2020, a consumer could complete the whole process and execute the 

agreement without ever encountering the agreement term and early termination fee provisions. 

The consumer had to click on optional hyperlinks to the Merchant Application & Agreement and 

Merchant Processing Terms and Conditions or excerpts. 

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35. Some versions of the electronic process put a link to the complete documents on 

the “accept screen.” A consumer who clicked on the link would see an electronically generated 

Merchant Application & Agreement and Merchant Processing Terms and Conditions, an 

example of which is depicted in Exhibit 1. It is substantially similar to versions of the 

documents that a minority of consumers execute on paper. 

36. Only a consumer who clicked on a link to the full documents would be presented 

with those documents before being asked to agree to them. Even then, the consumer would have 

to read through the document, typically down to the third page, to find the agreement term and 

early termination fee provisions. See Exhibit 1, p. 3. 

37. In order to view the autorenewal and cancellation provisions, a consumer who 

clicked on the optional hyperlinks would have to read through multiple pages of dense, singlespaced text in the Merchant Processing Terms and Conditions to find the following paragraph: 

Term; Termination. The initial term of this Agreement shall commence upon BANK’s 

acceptance hereof (as evidenced by BANK’s performance hereunder) and continue in full 

force and effect for the term set forth in the Acknowledgments section of the Merchant 

Application & Agreement. Thereafter, the Agreement will automatically renew for 

additional one-year periods unless MERCHANT gives (and BANK receives) written 

notice of non-renewal, no less than thirty (30), but no more than ninety (90), days prior to 

the end of the applicable term. The written notice must contain MERCHANT’s signature 

as it appears on the Merchant Application & Agreement in order to be accepted. 

An example of the paragraph as it appears in context is shown as numbered paragraph 11. 

Exhibit 1, p. 9. 

38. Defendants have been receiving complaints that consumers were not aware of the 

early termination fee, agreement term, auto-renewal and cancellation provisions for many years. 

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Unfair Debiting Practices 

39. First American handles all electronic billing and credits on behalf of Defendants. 

In addition to making it difficult for consumers to cancel the underlying agreements by failing to 

disclose adequately the autorenewal and cancellation requirements, Defendants, through First 

American, engage in unfair debiting practices that make it extremely difficult for consumers to 

stop electronic debits against their bank accounts.

40. First American requires consumers to provide direct access to their bank accounts 

so that the company may credit payments as well as debit fees or other purported financial 

obligations of the consumer. First American executes these credits and debits through the 

Automated Clearinghouse (“ACH”) electronic funds transfer network. Consumers who wish to 

cancel First American’s services or dispute fees frequently attempt to block withdrawal of fees 

by requesting a “stop payment” through their financial institutions. 

41. If First American receives notice of a stop-payment request, it suspends the 

consumer’s account and often places the account in collection status. First American’s collection 

department routinely attempts to initiate further ACH debits in an attempt to collect alleged 

collection balances, including early termination fees, even for consumers who have stoppayment orders in place. In many instances, this occurs before Defendants attempt to re-contact 

consumers. In some instances, the collection department evades existing stop-payment orders by 

debiting different active bank accounts held by the consumer or by changing the company name 

associated with the ACH debit. For example, after a consumer successfully stops a debit with the 

company name “First American,” the collection department may initiate a debit under the 

company name “Merimac Capital,” an assumed name for First American’s in-house equipment 

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leasing operation, or vice versa. In some instances, First American has attempted multiple times 

to debit the same fee, such as an early termination fee. In some instances, consumers are forced 

to close their bank accounts to stop continued withdrawals, and some consumers’ bank accounts 

have been overdrawn because of these practices.

42. Similarly, First American does not treat a communication from a consumer 

disputing a fee or instructing the company not to assess a specific fee as adequate to revoke 

authorization to debit that fee. Instead, as detailed above, it continues to attempt to debit fees 

even after a consumer has communicated an authorization revocation. 

43. Moreover, First American does not communicate to consumers about how to 

revoke ACH authority in a way that First American honors. In numerous instances, First 

American has debited consumers for fees that consumers told First American they did not owe, 

would not pay, or instructed First American not to charge. 

44. Between Defendants’ failure to disclose the agreement cancellation requirements 

or ACH revocation requirements and their affirmative efforts to evade consumers’ stop payment 

orders, consumers face great difficulties in stopping recurring electronic debiting. Defendants 

have failed to provide a “simple mechanism” for consumers to stop recurring charges. 

Defendants’ procedures continue to permit these unfair practices, and the FTC continues to 

receive complaints from consumers about these practices. 

45. Based on the facts and violations of law alleged in this Complaint, the FTC has 

reason to believe that Defendants are violating or are about to violate laws enforced by the 

Commission. Consumers have complained to Defendants about the practices and inadequate 

disclosures that are the subject of this Complaint for many years. Only after receiving notice of 

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the FTC’s investigation in January 2020 did Defendants modify FirstOnBoard to include 

references to the agreement term and early termination fee in the mandatory acknowledgments, 

and implement additional compliance measures. Defendants continue to engage in unfair 

debiting practices, and FirstOnBoard still does not adequately disclose the autorenewal and 

cancellation provisions. Further, consumers continue to complain about sales misrepresentations 

that occurred after Defendants were notified of the FTC investigation. 

VIOLATIONS OF THE FTC ACT 

46. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts 

or practices in or affecting commerce.” Misrepresentations or deceptive omissions of material 

fact constitute deceptive acts or practices prohibited by Section 5(a) of the FTC Act. Acts or 

practices are unfair under Section 5 of the FTC Act if they cause or are likely to cause substantial 

injury to consumers that consumers cannot reasonably avoid themselves and that is not 

outweighed by countervailing benefits to consumers or competition. 15 U.S.C. § 45(n). 

Count I 

Misrepresentation—Cancellation 

47. In numerous instances, in connection with the marketing, promotion, offering for 

sale, or sale of payment processing services, Defendants represent, directly or indirectly, 

expressly or by implication, that Defendants’ services can be cancelled: 

(a) during an initial trial period with no penalty; 

(b) prior to the end of a written agreement term with no penalty; or 

(c) at any time with no penalty. 

48. In truth and in fact, in numerous instances in which Defendants make the 

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representations set forth in Paragraph 47, Defendants’ services cannot be cancelled without 

penalty, and instead Defendants charge consumers an early termination fee for cancellation 

before the end of their contract term. 

49. Therefore, Defendants’ representations as set forth in Paragraph 47 are false and 

misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

Count II

Misrepresentation—Monthly Fees 

50. In numerous instances, in connection with the marketing, promotion, offering for 

sale, or sale of payment processing services, Defendants represent, directly or indirectly, 

expressly or by implication, that the recurring monthly fees for Defendants’ services will not 

exceed a specified total amount. 

51. In truth and in fact, in numerous instances in which Defendants make the 

representations set forth in Paragraph 50, recurring monthly fees for Defendants’ services have 

exceeded the specified total amount. 

52. Therefore, Defendants’ representations as set forth in Paragraph 50 are false and 

misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

Count III 

Deceptive Savings Claims 

53. In numerous instances, in connection with the marketing, promotion, offering for 

sale, or sale of payment processing services, Defendants represent, directly or indirectly, 

expressly or by implication, that consumers will save a significant amount of money by using 

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Defendants’ services. 

54. The representation set forth in Paragraph 53 is false or misleading or was not 

substantiated at the time the representation was made. 

55. Therefore, the making of the representation as set forth in Paragraph 53 

constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. 

§ 45(a).

Count IV 

Unfair Debiting Practices

56. In numerous instances, Defendants withdraw money from consumers’ bank 

accounts without the express authorization of consumers, including by withdrawing money after 

consumers have revoked authorization. 

57. Defendants’ actions cause or are likely to cause substantial injury to consumers 

that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing 

benefits to consumers or competition. 

58. Therefore, Defendants acts or practices as set forth in Paragraph 56 constitute 

unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a), (n). 

VIOLATIONS OF ROSCA 

59. In 2010, Congress passed the Restore Online Shoppers’ Confidence Act, 15 

U.S.C. §§ 8401–05, which became effective on December 29, 2010. Congress passed ROSCA 

because “[c]onsumer confidence is essential to the growth of online commerce. To continue its 

development as a marketplace, the Internet must provide consumers with clear, accurate 

information and give sellers an opportunity to fairly compete with one another for consumers’ 

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business.” Section 2 of ROSCA, 15 U.S.C. § 8401. 

60. Section 4 of ROSCA, 15 U.S.C. § 8403, generally prohibits charging consumers 

for goods or services sold in transactions effected on the Internet through a negative option 

feature, as that term is defined in the FTC’s Telemarketing Sales Rule (“TSR”), 16 C.F.R. 

§ 310.2(w), unless the seller: (a) clearly and conspicuously discloses all material terms of the 

transaction before obtaining the consumer’s billing information; (b) obtains the consumer’s 

express informed consent before making the charge; and (c) provides simple mechanisms to stop 

recurring charges. See 15 U.S.C. § 8403. 

61. The TSR defines a negative option feature as: “in an offer or agreement to sell or 

provide any goods or services, a provision under which the consumer’s silence or failure to take 

an affirmative action to reject goods or services or to cancel the agreement is interpreted by the 

seller as acceptance of the offer.” 16 C.F.R. § 310.2(w). 

62. As described in Paragraphs 26 through 37, Defendants advertise and sell payment 

processing services sold in transactions effected on the Internet through a negative option feature 

as defined by the TSR, 16 C.F.R. § 310.2(w). 

63. Pursuant to Section 5 of ROSCA, 15 U.S.C. § 8404(a), and Section 18(d)(3) of 

the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of ROSCA constitutes an unfair or deceptive act 

or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a). 

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COUNT V 

Violation of ROSCA 

64. In numerous instances, in connection with charging consumers for a good or 

service sold in a transaction effectuated on the Internet through a negative option feature, 

Defendants fail to: 

(a) clearly and conspicuously disclose all material terms of the transaction, 

including the agreement term, early termination fee, autorenewal 

provision, and cancellation requirements, before obtaining the consumer’s 

billing information; 

(b) obtain the consumer’s express informed consent before charging the 

consumer’s credit card, debit card, bank account, or other financial 

account for the transaction; or 

(c) provide simple mechanisms for a consumer to stop recurring charges for 

the good or service to the consumer’s credit card, debit card, bank 

account, or other financial account. 

65. Defendants’ practices as set forth in Paragraphs 26 through 44 are violations of 

Section 4 of ROSCA, 15 U.S.C. § 8403, and are therefore violations of a rule promulgated under 

Section 18 of the FTC Act, 15 U.S.C. § 57a, 15 U.S.C. § 8404(a), and therefore constitute an 

unfair or deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

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CONSUMER INJURY 

66. Consumers are suffering, have suffered, and will continue to suffer substantial 

injury as a result of Defendants’ violations of the FTC Act and ROSCA. Absent injunctive relief 

by this Court, Defendants are likely to continue to injure consumers and harm the public interest. 

PRAYER FOR RELIEF 

 Wherefore, Plaintiff requests that the Court: 

(a) enter a permanent injunction to prevent future violations of the FTC Act 

and ROSCA by Defendants; 

(b) award monetary and other relief within the Court’s power to grant; and

(c) award any additional relief as the Court determines to be just and proper 

 Respectfully submitted, 

 

Dated: July 29th, 2022 /s/ Jason C. Moon 

JASON C. MOON 

THOMAS B. CARTER 

EDWARD HYNES 

Federal Trade Commission 

1999 Bryan Street, Suite 2150 

Dallas, Texas 75201 

(214) 979-9378; jmoon@ftc.gov (Moon) 

(214) 979-9372; tcarter@ftc.gov (Carter) 

(214) 979-9381; ehynes@ftc.gov (Hynes) 

(214) 953-3079 (Fax) 

ATTORNEYS FOR PLAINTIFF 

FEDERAL TRADE COMMISSION 

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