Nevada AG Masto Announces Action Against Payment Processor

Dec. 11, 2007 -- Reno, NV — Nevada Attorney General Catherine Cortez Masto announced today that the State of Nevada, along with six other states and the Federal Trade Commission (“FTC”), have charged Your Money Access, LLC, d/b/a Netchex Corp., Universal Payment Solutions, Check Recovery Systems, Nterglobal Payment Solutions, Subscription Services, Ltd.; YMA Company, LLC, Derrelle Janey, and Tarzenea Dixon, with violating federal and state laws by debiting, or attempting to debit, more than $200 million from consumers' bank accounts on behalf of fraudulent telemarketers and Internet-based merchants.

Automated clearing houses contract with merchants to process customers’ credit card payments, demand drafts and automatic debits to consumer accounts for payment for goods or services. In the case of honest businesses, automated clearing houses provide a benefit to merchants and consumers by enabling electronic payments.

However, fraudulent telemarketers and Internet-based merchants cannot perpetrate their scams without the assistance of automated clearing houses who, for profit, continue to process payments for fraudulent telemarketers and Internet-based merchants, regardless of consumer complaints and demands for refunds.

The State of Nevada, the FTC and the attorneys general of Illinois, Iowa, North Carolina, North Dakota, Ohio, and Vermont have charged the defendants with offering payment processing services to a variety of fraudulent merchants, many of which were engaged in deceptive telemarketing or Internet-based schemes. These schemes were designed to extract money from consumer bank accounts by inducing consumers, through misrepresentations and omissions in connection with the marketing of products or services, to provide the merchant with the consumer's personal bank account information. The merchants then transmitted the bank account information to the defendants, who processed debits to the consumers' bank accounts.

Between June 23, 2004 and March 31, 2006, the defendants processed more than $200 million in debits and attempted debits to consumers' bank accounts. The complaint alleges more than $69 million of the attempted debits were returned or rejected by consumers or their banks for various reasons, In many instances, after the defendants debited accounts, the merchants failed to deliver the promised products or services, or sent consumers relatively worthless items. The complaint alleges that by providing access to the banking system and the means to extract money from consumers' bank accounts, the defendants played a critical role in their clients' fraudulent and deceptive schemes.

The complaint seeks a permanent bar on further violations, monetary relief, including consumer redress and the disgorgement of ill-gotten gains, and civil penalties under applicable state claims.

Attorney General Masto and Consumer Advocate Eric Witkoski warn that the states and the federal government are now taking a hard look not only at people and businesses engaged in deceptive business schemes, but also those businesses which knowingly and in disregard of consumer rights provide the necessary services to make such fraudulent schemes possible. For more information on how you can help prevent illegal deceptive trade practices you may contact the Nevada Office of the Attorney General, Bureau of Consumer Protection at (775) 684-1169 in northern Nevada, or (702) 486-3194 in southern Nevada.

Source: Nevada Attorney General

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