Humboldt Merchant Services Pays $12 Million to Resolve FTC Fraud Allegations

How Did the FTC Build Its Case Against Humboldt?

Humboldt Merchant Services, an independent sales organization that processes credit and debit card transactions for merchants, agreed on September 9, 2026, to pay $12 million to settle a Federal Trade Commission lawsuit. The FTC accused the company of knowingly facilitating fraudulent payment schemes by processing transactions for deceptive merchants who misled consumers with fake products and services. The settlement resolves claims that Humboldt violated federal consumer protection laws by turning a blind eye to suspicious activity.

The FTC’s investigation revealed that Humboldt Merchant Services continued to process payments for merchants despite clear warning signs, including high chargeback rates and consumer complaints about non-delivery of goods. Internal records showed the company received alerts about suspicious accounts but failed to terminate relationships or conduct proper due diligence. By enabling these operations, Humboldt allegedly helped scammers reach hundreds of thousands of consumers who were charged for products they never received or services that were never rendered.

What Changes Will Humboldt Be Required to Make?

The FTC built its case using transaction data, merchant applications, and communications between Humboldt and its sales agents. Investigators found that Humboldt processed over $200 million in transactions for merchants linked to fraudulent marketing campaigns promoting fake tech support, weight loss supplements, and government grant programs. Sales agents were incentivized to onboard high-volume merchants quickly, often bypassing standard verification steps. The complaint noted that Humboldt’s risk monitoring systems were either ignored or overridden to maintain profitable relationships.

As part of the settlement, Humboldt Merchant Services must implement a comprehensive compliance program to prevent future misconduct. This includes enhanced merchant screening procedures, real-time transaction monitoring, and mandatory training for sales teams on identifying red flags. The company is also prohibited from processing payments for any merchant found to be engaging in deceptive practices. An independent auditor will review Humboldt’s adherence to these requirements every two years for the next decade.

What specific types of fraud were linked to the merchants Humboldt processed payments for? The FTC identified fraud involving fake tech support services, bogus weight loss products, and false government grant offers, where consumers paid for nothing in return.

Frequently Asked Questions

Did Humboldt Merchant Services admit wrongdoing in the settlement? No, the company did not admit liability as part of the settlement agreement but agreed to the financial payment and injunctive terms to resolve the lawsuit.

Will consumers receive refunds as part of this settlement? Yes, a portion of the $12 million will be used to provide refunds to consumers who were harmed by the fraudulent transactions processed by Humboldt.