CFPB sues payments processor for allegedly supporting clients’ tech-support scams

A lawsuit filed in Wednesday by the Consumer Financial Protection Bureau (CFPB) alleges that Chicago-based BrightSpeed Solutions Inc. and its founder and former chief executive officer, Kevin Howard, knowingly processed payments for companies engaged in internet-based technical-support fraud.

In a suit filed in the U.S. District Court for the Northern District of Illinois, the CFPB alleges that between 2016 and 2018, Howard and BrightSpeed knowingly processed payments for client companies that purported to offer technical-support services and products over the internet but instead tricked consumers, often older Americans, into purchasing expensive and unnecessary antivirus software or services for amounts sometimes as high as $2,000.

The suit states that BrightSpeed and Howard processed remotely created check payments (with the remotely created check, or RCC, drawn on the customer’s bank account, often authorized remotely so not bearing the customer’s signature) for more than 100 client companies totaling more than $71 million. It alleges that BrightSpeed and Howard continued to process the scammers’ remotely created check payments for months and – in some cases, years – despite being aware of nearly 1,000 consumer complaints, several inquiries from police departments around the country, and return rates averaging more than 20%.

The complaint notes that BrightSpeed processed the payments through two regional banks, unnamed in the suit, and those banks terminated their relationships with the company in the summer of 2018 and in 2019, one following an internal investigation and the other due to the excessive risk posed by the tech-support clients’ accounts.

The CFPB alleges that Howard’s and BrightSpeed’s actions were unfair practices in violation of the Consumer Financial Protection Act of 2010 and deceptive telemarketing practices in violation of the Telemarketing Sales Rule. The complaint bureau seeks injunctions against BrightSpeed and Howard, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

Consumer Financial Protection Bureau Takes Action Against Payment Processor and Its Former CEO for Supporting Internet-Based Technical-Support Scams