Joint And Several Liability For Payment Processor That Facilitated Fraud

On December 13, the Eleventh Circuit Court of Appeals affirmed the decision of the U.S. District Court for the Middle District of Florida finding a credit card payment processor jointly and severally liable, under a theory of aiding and abetting, for the full judgment entered against fraudulent telemarketers. Federal Trade Commission v. WV Universal Management, LLC, No. 6:12-cv-01618-ACC-KRS (11th Cir. Dec. 13, 2017) (hereinafter "Appellate Opinion"). The payment processor, Universal Processing Services of Wisconsin, LLC ("Universal") and its then President, Derek DePuydt, did not appeal the trial court's finding of aiding and abetting liability under the Federal Trade Commission's ("FTC's") telephone sales rule ("TSR"), but challenged the amount of judgment. Id. at 2. While some courts have rejected efforts by the Consumer Financial Protection Bureau ("CFPB") to establish vicarious liability for the acts of payment processors,¹ the decision provides useful guidance