Federal Trade Commission Act
Federal Trade Commission v. 5967 Ventures LLC
Date: Sept. 8, 2026
Issue: Whether 5967 Ventures, which does business as Humboldt Merchant Services, violated the Federal Trade Commission Act by opening and maintaining payment processing accounts for merchants that were shell companies or engaged in fraud.
Case Summary: Humboldt Merchant Services agreed to pay $12 million to resolve allegations that it violated the FTC Act by opening and maintaining payment processing accounts for merchants that were shell companies or engaged in fraud.
The FTC alleged that Humboldt unlawfully processed payments for more than 1,000 merchants that it knew, or deliberately avoided knowing, were shell companies used in unauthorized billing schemes. The FTC claimed fraudulent businesses used these shell companies to open sham merchant accounts and charge consumers’ credit and debit cards without permission. From 2021 through 2023, Humboldt allegedly processed more than $100 million through these accounts. Humboldt specialized in “high-risk” merchants, including online sellers of nutraceutical supplements and other products that used free trials to enroll consumers in recurring subscriptions. As this business grew, Humboldt’s annual profits increased from about $7.5 million in 2014 to more than $80 million in 2017.
The FTC also alleged that Humboldt continued processing these payments despite repeated signs of fraud. Mastercard warned Humboldt that thousands of accounts appeared to involve load balancing and card sharing, and a senior underwriter warned management that shell accounts with straw signers supported obvious fraud schemes. According to the FTC, Humboldt ignored those warnings, moved Performance Marketing accounts to a lower-risk bank identification number to increase transaction approvals, and continued opening thousands of accounts despite unusually high chargeback rates. The FTC claimed this steady supply of shell accounts helped fraudulent merchants avoid detection and continue charging consumers without authorization.
To resolve the claims, Humboldt agreed to pay $12 million to the FTC for consumer relief. Humboldt also agreed to strengthen its screening and monitoring of merchants, review chargeback and fraud activity, investigate suspicious accounts, and close accounts tied to deceptive practices or efforts to evade fraud controls. Humboldt also agreed to monitor its sales agents and end relationships with agents that refer fraudulent or deceptive merchants. Humboldt did not admit to or deny the allegations against it.
Bottom Line: Humboldt agreed to pay $12 million and strengthen its fraud controls to resolve FTC allegations without admitting or denying the allegations.
Document: Order
