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FTC files suit against Independant Resources Network Corp.

150px-US-FederalTradeCommission-Seal.svgThe FTC recently filed suit against payment processor Independant Resources Network Corp., which the regulator alleges knew about a telemarketing scam operated by Innovative Wealth Builders.

In an amended court complaint, the FTC alleges that IRN knew or consciously avoided knowing about key aspects of IWB’s telemarketing scam and continued profiting from processing IWB’s credit card transactions, ignoring the firm’s “alarmingly high chargeback rates.”

When a consumer disputes a credit card charge and the charge is reversed, resulting in a chargeback. The average chargeback rate in the U.S. is below one percent, but the FTC alleges that IWB’s chargeback rate averaged higher than 20 percent for some years, exceeding 40 percent during some time periods.

“Despite knowing, or consciously avoiding knowing, the illegal nature of the IWB Defendants’ business, IRN processed millions of dollars of credit card transactions for IWB, thereby earning considerable fees for itself while allowing the IWB Defendants to harm thousands of consumers who purchased the IWB Defendants’ bogus credit card interest rate reduction services,” the FTC said in the complaint.

The amended complaint alleges that IRN is liable in the case for assisting and facilitating deceptive telemarketing practices that violate the Telemarketing Sales Rule. A U.S. district court halted IWB’s business operations in January at the FTC’s request.

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