Ex-President of Your Money Access Settles With FTC

Derrelle Janey, the ex-president of Your Money Access, has agreed to settle a civil case with the FTC and the consumer affairs agencies of seven states. The FTC and the states claim that Your Money’s client merchants allegedly made unauthorized debits from consumers’ bank accounts and violated the FTC’s Telemarketing Sales Rules. Your Money Access was owned by a PE firm from 2003 to 2006. Janey, under the settlement, denies any liability. The U.S. Federal Court for the Eastern District of Pennsylvania has made no findings on the merits of the allegations and made no judgment of liability, the statement said. As part of the settlement, Janey will not participate in certain dimensions of payment processing, agrees to not knowing help anyone to violate the Telemarketing Sales Rule and has paid $15,000 to the FTC.

PRESS RELEASE

The former president of a payment processing company, Your Money Access, LLC, has agreed to settle a civil case brought by the Federal Trade Commission (FTC) and the consumer affairs agencies of seven states – Illinois, Iowa, Nevada, North Carolina, North Dakota, Ohio, and Vermont  – arising from allegations that the company’s client merchants allegedly made unauthorized debits from consumers’ bank accounts and violated the FTC’s Telemarketing Sales Rules.  Under the settlement agreement, Mr. Janey explicitly denies any liability and, in approving the settlement, the United States Federal Court for the Eastern District of Pennsylvania (the Court) made no findings on the merits of the allegations and made no judgment of liability.

Derrelle Janey served as president of Your Money Access, LLC, a Florida-based private-equity sponsored payment processor from 2003 to 2006, when the company sought to expand its operations into the Northeast through the acquisition of a Philadelphia area-based third-party payments processor.  Ultimately, it appears that the acquired business entity made material misrepresentations to Mr. Janey and Your Money Access, LLC.  Your Money Access, LLC subsequently brought litigation against the former owners of the acquired company on the grounds that they failed to disclose material information about its telemarketing client merchants, including its compliance practices.  The government sued the former owners for fraud and seized their assets.  Nevertheless, subsequently, the FTC and seven states brought litigation against Your Money Access, LLC, its Chief Executive Officer and its former President, Mr. Janey, on the theory that they knew or should have known about the underlying conduct of the client merchants it gained through the acquisition.  The Office of Comptroller of the Currency (OCC) also brought an action against Your Money Access, LLC’s clearing bank, Wachovia, and assessed it a penalty in excess of $125 million.

Wachovia finalized its agreement with the OCC in April 2008.  After Mr. Janey left the company, Your Money Access, LLC declared bankruptcy and was unable to defend itself.  Also in 2008, the company’s CEO executed a consent agreement with the FTC and effectively did not defend against the action.  Mr. Janey, however, engaged in litigation with the FTC and the seven states beginning in December 2007, which ultimately resulted in the voluntary settlement agreement entered into between Mr. Janey, the FTC and the seven states on August 10, 2010.  The Court approved the settlement on August 11, 2010.  Mr. Janey was represented by William Dahill of Wollmuth Maher & Deutsch LLP in connection with the settlement.

Under the settlement agreement, Mr. Janey voluntarily agreed not to participate in certain dimensions of payment processing.  He also agreed to not knowingly aid anyone who is violating the Telemarketing Sales Rule.  In addition, Mr. Janey made a $15,000 payment to the FTC.