FTC orders two processors to screen merchants, with negative option and healthcare products under extra scrutiny

The FTC alleged that Nuvei processed more than $30 million for a tech support scam and other deceptive merchants it knew or should have known about, and that Humboldt processed for more than 1,000 shell merchants fronting for unauthorized billing schemes at chargeback rates almost ten times what the card brands treat as excessive. Nuvei pays $4.85 million and Humboldt $12 million. Both settled by stipulated order; the allegations are the FTC's.

Both orders define a Covered Client that must be screened before boarding and watched after. Nuvei's includes any merchant with a negative option feature or a Healthcare-Related Product, defined to include access to healthcare providers or networks, virtually or in person; screening means reading the full website, six months of processing statements and marketing materials, and any covered client above a one percent chargeback rate with more than 75 chargebacks in two of six months must be investigated. Humboldt may not board e-commerce merchants with a negative option, no processing history or an entity under a year old whose only address is a mailbox store, registered agent or virtual office, nor any MATCH listed merchant.

• Telehealth and online pharmacy merchants billing subscriptions or offering access to providers, especially new entities or those using a virtual office address.
• Acquirers, payment facilitators and ISOs, whose underwriting files now have a federal template to match.

The orders bind two processors. Their screening language is the FTC's current template, and other processors and acquirers tend to adopt it.

1. Check your last six months of statements against a one percent chargeback rate and 75 chargebacks a month.
2. List a physical operating address on your merchant account, not a mailbox store or registered agent.
3. If you bill subscriptions, give your acquirer your current checkout, cancellation flow and refund terms.

Payment and Compliance History. The Payment and Compliance History domain reviews dispute history and standing with processors. The FTC's thresholds and covered categories are now part of what a processor will look for.

• Payment Processor Nuvei Must Implement Robust Merchant Screening Practices and Pay $4.85 Million to Settle FTC Charges
  PrimaryFederal Trade CommissionRetrieved Sep 22, 2026
• Stipulated Order for Permanent Injunction, FTC v. Nuvei Corporation et al., D. Ariz. No. 2:26-cv-06306
  PrimaryFederal Trade CommissionCase 2:26-cv-06306, Document 3-1, filed 09/04/26Retrieved Sep 22, 2026

  Definitions K (Covered Client) and Q (Healthcare-Related Product); Section IV screening; the one percent and 75 chargeback monitoring provisions.

• FTC Takes Action Against Payment Processor Humboldt Merchant Services for Knowingly Facilitating Payment Processing for Sham Merchants
  PrimaryFederal Trade CommissionRetrieved Sep 22, 2026
• Stipulated Order, FTC v. Humboldt Merchant Services
  PrimaryFederal Trade CommissionRetrieved Sep 22, 2026

  Definition F (Covered Client); the mailbox, registered agent and virtual office prohibition; MATCH provision; Section III screening.