High-Risk Payments: BlueSnap Settles for $10 Million with FTC Over Fraudulent Payment Processing!

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Payment processor BlueSnap, its former CEO Ralph Dangelmaier, and SVP Terry Monteith agreed to a $10 million settlement with the Federal Trade Commission (FTC) for its role in processing payments for companies engaged in deceptive and fraudulent practices. The settlement mandates significant financial restitution aimed at compensating consumers and a strict prohibition against processing payments for certain high-risk clients.

Allegations of Negligence and Fraud

The FTC’s complaint, filed in federal court, details how BlueSnap and its key officers processed millions of dollars in transactions for ACRO Services, a company flagged repeatedly for fraudulent activities. Despite receiving multiple warnings and clear indicators of fraud—including alarmingly high chargeback rates reported by Visa, which ranged between 29% and 40%, and direct communications from American Express concerning fraudulent activities—BlueSnap allegedly continued its business relations with ACRO Services.

The complaint highlights that from at least 2019 to 2021, BlueSnap executives, including Dangelmaier and Monteith, “turned a blind eye” to these red flags. Notably, even BlueSnap’s internal fraud monitoring team explicitly reported to Dangelmaier and Monteith that ACRO was defrauding consumers, yet no decisive action was taken to terminate the fraudulent accounts.

Broader Implications for the Payment Processing Industry

This case casts a spotlight on the responsibilities of payment processors in the financial ecosystem, especially regarding their duty to vet and monitor client activities to prevent fraud. Samuel Levine, director of the FTC Bureau of Consumer Protection, criticized companies like BlueSnap for facilitating scammers, stating, “Companies that knowingly process payments for scammers are breaking the law and making it easier to cheat consumers.”


The FTC’s action against BlueSnap underscores a growing trend of regulatory bodies taking stringent measures to curb financial crimes facilitated through negligent or willful ignorance by payment processors. This settlement not only aims to compensate affected consumers but also to significantly reform BlueSnap’s operational protocols, thereby contributing to broader efforts to enhance transparency and accountability within the financial services industry.

CategoriesUS FTC

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