A Victoria-area e-commerce company and its chief executive officer have agreed to pay $6.75 million to the U.S. Federal Trade Commission to settle charges claiming the firm laundered credit card payments for technology-support scammers.
According to the American regulator, RevenueWire and CEO Roberta Leach reached a deal with the consumer protection body after being accused of using company accounts to process credit card charges and collect payments for companies that allegedly bilked customers out of millions by convincing them they needed unnecessary tech support.
“Finding ways to get paid — without getting caught — is essential for scammers who steal money from consumers,” FTC consumer protection bureau director Andrew Smith said in a statement.
“And that’s exactly what RevenueWire did for tech-support scammers when it laundered their transactions through the credit card system.”
‘Free scan’ leads to unnecessary repairs
In a statement, a lawyer for RevenueWire said the company decided to settle rather than enter into costly litigation with the U.S. government. But the company says the settlement is neither an admission to the allegations themselves, or the FTC’s interpretation of them.
Leach has been at the helm of the company since 2009, winning a Stevie business award in 2016 as the top female executive in Canada.
According to company promotional material, RevenueWire helps software and subscription companies sell online. The company provides e-commerce services to firms around the world.
The original FTC complaint concerns RevenueWire’s relationship with a pair of companies — ICE and Vast — accused of convincing customers to buy technology-support services they don’t need through software that suggests their computers are problem-ridden.
“The software company typically offers consumers a ‘free scan’ to check their computer’s ‘health.’ After consumers obtain the results of the scan, a web page tells them they need to purchase the full software to fix the purported errors identified in the scan, and to call a phone number to activate the software,” the FTC complaint reads.
But instead of a technician, customers reach telemarketers who run “deceptive” diagnostic checks followed by a sales pitch for costly computer repair.
“The telemarketers make misrepresentations to consumers about “necessary” repairs to their computers and often fail to run meaningful diagnostics to determine the cause of any purported problems,” the complaint reads.
“The telemarketers charge consumers hundreds of dollars for their purported tech support services.”
‘A bunch of crooks’
According to the complaint, RevenueWire brokered contracts with both third party software companies and the call centre scammers.
The company was also accused of adding “bogus” pop-ups to its service that “claimed to have detected computer infections, froze consumers’ computer screens, and directed consumers to call toll-free numbers to fix the supposed problems.”
The FTC claims RevenueWire and Leach “received multiple warning signs” about the scammers, including complaints from both business partners and consumers.
The complaint cites a company fraud analyst who warned RevenueWire’s vice president of finance about one of their partners in an email that was forwarded to Leach.
“We’re dealing with a bunch of crooks here … and we are intrinsically associated with anything they do,” the fraud analyst allegedly wrote.
“I don’t particularly fancy RW [RevenueWire] being caught up in a money-laundering/RICO investigation because of these clowns, but if things continue on as they are, it’s eminently possible that we will be.”
RevenueWire corporate counsel Rajiv Gandhi said the allegations pertain to complaints that are more than a decade old involving companies RevenueWire is no longer in business with.
“Had RevenueWire decided to fight, it would have presented its evidence,” he said.
“Instead, it agreed to settle and move forward. RevenueWire believes that its reputation in the industry and history of community involvement speaks for itself.”
As part of the settlement, RevenueWire is banned from any further payment laundering and must screen and monitor high-risk clients. Gandhi said the company has been doing that for years.