Qualpay, a payment processor based in California, agreed to settle the charges filed against it by the Federal Trade Commission (FTC), alleging that it ignored warning signs that MOBE was a fraudulent online business coaching program.
MOBE was a Malaysian company that defrauded more than $300 million from tens of thousands of consumers by offering them worthless business coaching products since 2013.
In June 2018, the FTC sued MOBE for its fraudulent business. In February this year, the company agreed to pay more than $17 million to settle the Commission’s lawsuit.
Qualpay allegedly violated the FTC Act
In the complaint against Qualpay, the FTC alleged that aside from ignoring clear warning signs that MOBE was a fraudulent business, the payment processor also failed to follow its own policies and procedures when underwriting MOBE’s accounts.
The warning signs ignored by Qualpay included questions about whether MOBE was a domestic or international company, the nature of MOBE’s business model, MOBE’s history of excessive chargebacks, and claims MOBE made in its marketing materials about helping consumers make “hundreds of thousands of dollars per year.”
