Client Alert

Joint and Several Liability for Payment Processor That Facilitated Fraud

15 Dec 2017

On December 13, the Eleventh Circuit Court of Appeals affirmed the decision of the U.S. District Court for the Middle District of Florida finding a credit card payment processor jointly and severally liable, under a theory of aiding and abetting, for the full judgment entered against fraudulent telemarketers. While some courts have rejected efforts by the Consumer Financial Protection Bureau to establish vicarious liability for the acts of payment processors, the decision provides useful guidance to payment processors as to the appropriate steps required at the merchant underwriting and monitoring phases.

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