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First American Payment Processing, Inc., two related corporations, and their principals are banned from processing any payments for outbound telemarketers as part of a settlement with the Federal Trade Commission. The FTC had charged the defendants with assisting fraudulent telemarketers by electronically debiting consumers’ bank accounts in violation of the Telemarketing Sales Rule (TSR) and the FTC Act. The settlement announced today prohibits the defendants from engaging in the types of practices alleged in the complaint and requires them to pay redress in the amount of $1,580,739.

In January 2004, the FTC filed a complaint in federal district court against First American Payment Processing, Inc.; CET Corporation; Check Processing Center, LLC; Carl E. Towner; and Matthew Robinson alleging that they knowingly processed electronic payments for telemarketers who deceptively sold advance-fee credit cards or who engaged in other deceptive or abusive telemarketing practices. The FTC alleged that the defendants violated the TSR by providing substantial assistance and support to numerous telemarketing clients whom they knew or should have known were engaging in deceptive or abusive telemarketing practices. The FTC further alleged that the defendants violated the law by processing these consumer payments through the Automated Clearing House (ACH) Network on behalf of merchants engaged in outbound telemarketing to consumers. According to the FTC, the defendants’ payment processing activities breached rules governing the ACH Network (NACHA Rules) – rules to which they were contractually bound. The FTC also sued the wives of Messrs. Towner and Robinson as relief defendants.

The proposed stipulated permanent injunction and final order bans the defendants from processing payments for outbound telemarketers, regardless of the nature of the relationship between the telemarketer and consumer. The ban permanently prohibits the defendants from
processing payments through any mechanism – not just through the ACH Network – for outbound telemarketers. The proposed order allows the defendants to continue their legitimate payment processing activities, such as processing for clients whose business depends on consumer-initiated calls, so long as the business is not violating the TSR, the NACHA Rules, or the FTC Act.

In addition, the proposed order prohibits the defendants from violating any provision of the TSR, including assisting deceptive and abusive telemarketers. The proposed order specifically prohibits the defendants from providing substantial assistance to clients who the defendants know, or consciously avoid knowing, are violating the TSR by: (1) inducing consumers to pay for goods or services using false or misleading statements; (2) selling advance-fee credit cards; or (3) engaging in unauthorized billing of consumers’ accounts.

The proposed order requires the defendants to investigate the business practices of each of the companies for which they process transactions, and obtain written documents demonstrating that these companies’ business practices comply with the NACHA Rules regarding consumer authorization of debits. If the defendants learn that a client’s business practices violate the TSR, the NACHA Rules, or the FTC Act, the settlement prohibits them from processing payments for the client.

Finally, the settlement contains various provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote to authorize the staff to file the stipulated permanent injunction and final order proposed order was 5-0. The stipulated permanent injunction and final order was filed in the U.S. District Court, District of Arizona, Phoenix Division, on November 2, 2004 and requires the court’s approval to become final.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated final orders have the force of law when signed by the judge.

Copies of the stipulated permanent injunction and final order are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC Matter No. X04-0025)
(Civil Action No. CV 04-0074 PHX SRB)

Contact Information

Media Contact:
Brenda Mack,
Office of Public Affairs
Staff Contact:
Monica Vaca
Bureau of Consumer Protection