FTC: Court Orders Permanent Halt to Illegal Qchex Check Processing Operation

[Paul Ferguson <fergdawgster () gmail com>]

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Via FTC.gov.

[snip]

At the request of the Federal Trade Commission, a United States District
Court has ordered a permanent halt to the illegal operations of an
Internet-based check creation and delivery service and ordered the
operators to give up all the money they made from the illegal operation.

In September 2006, the FTC charged Qchex with violating federal law by
operating an online check creation and delivery service with no safeguards
in place to prevent fraud. Qchex.com created and sent checks drawn on any
bank account that a Qchex user identified but did not verify whether the
user had authority to draw checks on that account. As a result, fraudsters
worldwide used the Qchex service to draw thousands of checks on bank
accounts that belonged to unwitting third parties. Defendants' practices
harmed innocent account holders whose bank accounts were debited without
their knowledge or consent, as well as individuals and businesses who
received fraudulent Qchex checks as payment for goods and services.

Following protracted litigation, District Court Judge Janis L. Sammartino
of the Southern District of California issued a final order supporting the
FTC's charges that the defendants had created and delivered checks drawn
on identified bank accounts without first verifying that a person
requesting a check had authority to draw checks on that bank account.

[snip]

More:
http://ftc.gov/opa/2009/02/qchex.shtm

- - ferg

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-- 
"Fergie", a.k.a. Paul Ferguson
 Engineering Architecture for the Internet
 fergdawgster(at)gmail.com
 ferg's tech blog: http://fergdawg.blogspot.com/
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