FTC fines Humboldt $12 million, bans high‑risk payment processing
The Federal Trade Commission announced on September 2026 that payment processor Humboldt Merchant Services will pay $12 million and be barred from processing payments for merchants with a heightened fraud risk. The FTC alleged Humboldt processed payments for more than 1,000 shell merchants used in unauthorized billing scams.
The complaint said Humboldt opened and processed payments for merchants it knew, or consciously avoided knowing, were shell companies used by undisclosed third parties engaged in fraud. It also alleged Humboldt placed these sham accounts on a lower‑risk bank identification number licensed by the card networks to boost approval odds. The resulting order bars Humboldt from credit‑card laundering, processing payments for MATCH‑listed merchants, entities with law‑enforcement actions, and e‑commerce businesses that use only third‑party mailbox addresses and lack processing history.
“Humboldt was processing payments for companies despite red flags indicating they were scamming consumers,” Katherine White said.
Legion Media, a fraudulent company involved in unauthorized billing scams, was shut down by the FTC in 2024. The FTC’s complaint cites Legion Media as an example of the type of sham merchant Humboldt processed payments for.
What we know
Payment processing company Humboldt Merchant Services will pay $12 million and be permanently banned from processing payments for merchants with a heightened risk of potential fraud to settle allegations that Humboldt processed payments for merchants that defrauded consumers.
According to the FTC’s complaint, Humboldt processed payments for more than 1,000 merchants that were shell entities that served as fronts or pass-throughs for fraudulent companies engaged in unauthorized billing scams, including Legion Media, which the FTC shut down in 2024.
“Humboldt was processing payments for companies despite red flags indicating they were scamming consumers,” said Katherine White, Deputy Director of the FTC’s Bureau of Consumer Protection.
The Commission vote approving the filing of the proposed order was 2-0.