Payments firm accused of aiding 'contact Microsoft about a virus' scammers must cough $650k
'My computer locked up and a siren went off,' one mark tells Better Business Bureau
Updated Two execs and a multinational payment processing company must pay $650k to the US government, says the FTC, which accuses them of knowingly processing credit card payments for Microsoft-themed support scammers.
The Justice Department and the Feds claim [PDF] Nexway, along with a web of related companies based in France, Switzerland, Germany, and the US, violated the FTC Act and the Telemarketing Sales Rule by processing payments for India-based Tech Live Connect and "other foreign clients" that commit telemarketing fraud via tech support scams all over the world, although the agency and the department are regulating the United States side of things.
Nexway's CEO and its chief strategy officer, Victor Iezuitov and Casey Potenzone, are also named in the complaint.
An earlier monetary judgment ordered the payment of $49.5 million, but the FTC said that if the defendants pay the $650k, it will suspend this, adding that they had "agreed to court orders that prohibit them from any further payment laundering and require them to closely monitor other high-risk clients for illegal activity."
According to the complaint [PDF], filed on April 3 in the DC district court, the companies and the execs are at the "center of a technical support scam." The complaint alleges they "worked with telemarketers who made misrepresentations to consumers about the performance and security of their computers in connection with the sale of bogus technical support services."
It also claims that collectively, Nexway’s “premium tech support” clientele accounted for a quarter of all of its business between 2016 and 2019, citing the minutes of a July 11, 2019 leadership meeting at Nexway, which it said included Iezuitov and Potenzone.
The filing goes on to allege:
Since at least August 2016, Nexway provided its foreign tech support scammer clients, including Tech Live Connect Pte Ltd, Saburi TLC, and Sensei Ventures, Inc., which collectively did business as Tech Live Connect and Premium Techie Support ... substantial assistance and surreptitious access to the United States credit card system, thus allowing the tech support scammers to charge and obtain money from duped consumers.
The filing describes how Tech Live Connect used "deceptive pop ups to ensnare consumers," showing the type of thing it displayed to marks both in the US and further afield in the screenshot below. Consumers who called reached call centers in India and were convinced to pay for "repairs" and the consumers' credit card charges were processed by Nexway's credit card merchant account, the FTC claims. It alleges that Nexway "received a commission for each charge."
One worried consumer apparently told the Better Business Bureau: "My computer locked up and a siren went off and an alert came up on the screen saying contact Microsoft about a virus, along with a phone number."
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Windows-flavored support scams are as old as the OS itself. In 2018, Microsoft said it received 150,000 complaints about con artists calling about supposed dodginess in a user's system, prompting a long tradition of techies trolling scammers.
"Companies like Nexway that knowingly launder charges for scammers are breaking the law and helping scammers cheat money from consumers," said Samuel Levine, director of the FTC's Bureau of Consumer Protection. "The FTC will not hesitate to use its law enforcement powers to stop them."
We have asked Nexway for comment.
Have you ever trolled a tech support scammer? Make our Tuesday and add your best gags in the comments below. ®
Updated to add:
Nexway has been in touch to comment: "To date, Nexway company have moved on from the FTC complaint allegations and has already cooperated with the FTC in reaching today's resolution. The Nexway employees responsible for the conduct described in the FTC complaint are no longer with the company. Nexway teams have remained focused on our business of solving the pain points of digital transformation.
It added: "All company levels have been educated on the risks, and additional vigilance and precautionary measures have been implemented, particularly on CDD processes. Our teams are confident in the compliance program it has put in place to promote and ensure integrity in its relationships."