A permanent ban from consumer financial products and industries and a civil money penalty (CMP) of $500,000 are being sought in a final judgment that alleges a Chicago-based firm knowingly processed payments for companies engaged in internet-based, technical-support fraud, the federal consumer financial protection agency said Tuesday.
The Consumer Financial Protection Bureau (CFPB) said it is requesting the final judgment with a federal district court to resolve the lawsuit it brought last March against BrightSpeed Solutions and its founder Kevin Howard.
In the suit filed last spring in the U.S. District Court for the Northern District of Illinois, the CFPB alleged 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 stated 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. The CFPB lawsuit also alleged 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%.
Brightspeed ceased operations in March 2019. It was a privately owned, third-party payment processor founded in 2015 and operated by Howard.
The final judgment request asks the court to require BrightSpeed and Howard to permanently get out of multiple consumer financial industries and to pay the $500,000 CMP.
“Both BrightSpeed and Howard would be permanently barred from the payment processing, consumer lending, deposit-taking, and financial-advisory services,” the bureau said in its release. More specifically, the proposed stipulated judgment and order filed with the court Tuesday said Howard and the firm would be permanently barred from payment processing, consumer lending, deposit taking, debt collection, telemarketing (with respect to consumer financial products), and “advertising, marketing, offering for sale, selling, or providing any financial-advisory services.”