First Data Will Pay $40 Million in FTC Deal Over Consumer Scams

First Data Merchant Services LLC and a former executive agreed to pay more than $40 million to settle a claim by the Federal Trade Commission that the company processed payments and laundered credit card transactions for scams targeting hundreds of thousands of consumers.

The agency alleged that ex-vice president Chi “Vincent” Ko, through his former company First Pay Solutions, opened hundreds of fake merchant accounts and shell companies to take payments from the unwary.

The FTC claimed that First Data, one of the biggest payment processing companies in the U.S., received multiple “warnings and direct evidence” that Ko’s company was ...