The Federal Trade Commission announced a $12 million settlement on September 8, 2026 with 5967 Ventures LLC, doing business as Humboldt Merchant Services. The FTC alleges the payment processor opened and serviced accounts for more than 1,000 shell companies that acted as fronts for fraudulent operators running unauthorized billing schemes.

The FTC filed its complaint and a proposed stipulated order in the U.S. District Court for the Eastern District of Michigan. If the court enters the order, Humboldt will pay $12 million toward consumer redress and accept permanent restrictions on the merchants it can process for. Humboldt neither admitted nor denied the allegations, except as needed to establish jurisdiction, and has stated publicly that the conduct at issue occurred under prior leadership.

The FTC’s Allegations

The complaint describes a lengthy pattern of ignored warning signs. The FTC alleges Humboldt either recognized that over a thousand accounts were shell companies fronting for someone else, or deliberately avoided finding out. Among them were entities tied to Legion Media, a CBD and keto operation the agency shut down in 2024 over unauthorized billing and credit card laundering. Between 2021 and 2023 alone, the FTC says more than $100 million moved through those accounts.

Two allegations in particular should raise the attention of merchant account underwriters.

First, the accounts at issue allegedly generated chargeback rates close to ten times the level Mastercard and Visa treat as excessive. 

Second, the FTC says Humboldt moved certain accounts onto a lower-risk bank identification number used by an affiliated entity, which made issuing banks more likely to approve the transactions. The agency characterizes that as an attempt to evade the card networks’ own fraud controls.

What The Order Would Prohibit 

The FTC’s proposed order is explicitly focused on merchant identity, deceptive billing, chargeback history, transaction laundering, and evasion of network controls. 

It would bar Humboldt from engaging in or assisting credit card laundering, from providing false or misleading information to obtain processing, and from using tactics designed to evade fraud and risk monitoring, including load balancing. It would also prohibit processing for four merchant categories:

• Straw companies
• Merchants on Mastercard’s MATCH list for reasons including excessive chargebacks, fraud, laundering, collusion, illegal transactions, or identity theft
• Merchants previously named as defendants in certain FTC, federal, or state attorney general consumer protection actions involving fraud or deceptive practices
• Certain e-commerce merchants whose only address is a mailbox service, PO box, registered agent office, or virtual office, and that also use negative option billing, have no prior processing history, or were formed within the past year

What ISOs and Merchants Need To Look Out For 

This was the FTC’s second processor settlement in a week, following its resolution with Nuvei. 

For ISOs, processors, acquiring banks, and their sales agents, the question at hand is whether current onboarding files would survive the same review: how beneficial ownership is verified, when chargeback escalation triggers a response, how merchants are classified and placed on a BIN, and how closely independent sales agents are supervised. 

Merchants in specialty high risk markets have a parallel concern, since an account terminated or MATCH-listed on a processor’s read of this order can be difficult to replace.

Facing Regulatory Inquiry or Want To Ensure Compliance?

If you are a merchant, ISO, processor, or platform facing a regulatory inquiry, an account termination, or a MATCH listing, or if you need to confirm your compliance practices hold up, Rome LLP’s skilled payments and FTC enforcement defense attorneys are here to help. Reach out to us to discuss your situation.

About Rome LLP 

Rome LLP is a boutique Los Angeles law firm offering a spectrum of legal services to businesses facing complex legal challenges. Our experienced team of attorneys are dedicated to exacting excellent results on behalf of clients across industries in a wide range of matters, from international tech-based business litigation, domain name litigation, IP and trade secrets, FTC investigations and enforcement defense, payment processing and fintech disputes, as well as matters involving cryptocurrency and blockchain projects.