We wrote previously that for payment processors the death of Operation Choke Point was greatly exaggerated. We also noted that a prior challenge to the FTC’s ability to impose joint and several liability on an executive for his former employer’s actions had failed. A recent appellate victory for the FTC reinforces both these points. In FTC v. Universal Processing Services, 11th Circuit affirmed the district court’s imposition of joint and several liability on a payment processor for substantially assisting the Telemarketing Sales Rule (TSR) violations of its merchants. Simply put, the court’s ruling affirmed that a payment processor can be held responsible for the total volume of sales processed for a merchant when the processor’s conduct amounts and unfair or deceptive practice under the Federal Trade Commission Act (FTC Act). A violation of the TSR constitutes a violation of the FTC Act, which allows for penalties including…
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