The FTC said Humboldt Merchant Services processed payments for more than 1,000 shell entities linked to fraudulent businesses and unauthorized billing. The company will pay $12 million and face restrictions on serving high-risk merchants.

The Federal Trade Commission said payment processor Humboldt Merchant Services enabled large-scale fraud by handling transactions for more than 1,000 shell companies. According to the agency, those entities were connected to fraudulent businesses and unauthorized-billing operations that charged consumers without valid consent. The FTC said Humboldt continued processing payments despite warning signs about the merchants and their conduct. Under the proposed settlement, the company will pay $12 million and be prohibited from processing transactions for high-risk merchants unless it meets strict compliance requirements. Payment processors are a critical part of many scam operations because they can help fraudulent businesses accept card payments, hide their identities, and continue billing consumers after complaints begin. The case highlights the role of financial intermediaries in detecting suspicious merchants and stopping recurring-payment abuse. Regulators said the action is intended to protect consumers from deceptive billing and prevent payment infrastructure from being used to scale fraud. The FTC’s allegations are part of a broader enforcement effort focused on companies that facilitate consumer scams rather than directly contacting victims.