The Federal Trade Commission is sending over $2.6 million in refunds to small businesses harmed by payment processor First American Payment Systems.
The FTC filed a lawsuit in July 2022 against First American, charging the company with trapping small businesses with hidden terms, surprise exit fees, and zombie charges.
The FTC alleged the company made false claims about fees and cost savings to lure merchants.
Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent, which made it difficult and expensive for them to cancel the service.
The defendants settled the lawsuit with the FTC by paying money to refund small businesses. They also agreed to stop misleading businesses about their fees and make it easier for businesses to cancel their services.
The FTC is sending checks to 5,588 small businesses. Recipients should cash their checks within 90 days, as indicated on the check.
The agency is also mailing claim forms to 16,181 businesses that enrolled with First American Payment Systems between June 2017 and April 2020 and later cancelled their enrollment.
Businesses that were charged an early termination fee may apply for a refund. The deadline to submit a claim is May 7, 2025.
