FTC Fines Payment Processor Nuvei $4.85 Million for Facilitating Merchant Fraud

A $4.85 million penalty levied against payment processor Nuvei this week represents more than just a corporate fine; it equates to the exact dollar amount stolen from thousands of consumers who purchased non-existent CBD oils and dietary supplements. The Federal Trade Commission (FTC) announced the settlement on September 1, 2026, marking a decisive shift in how regulators treat the financial infrastructure that enables online retail fraud.[1]

For years, fraudulent merchants have relied on third-party payment processors to access the Visa and Mastercard credit card networks. According to the FTC's 42-page complaint, Nuvei and its former executive, Carolina Gallegos, provided these essential processing services to a network of scammers despite glaring warning signs.[1][2]

The agency found that Nuvei ignored exceptionally high chargeback rates—a key indicator of fraud—and continued to process payments for merchants that were actively deceiving buyers. In some instances, the chargeback rates for these accounts exceeded 40 percent, far above the industry standard threshold of 1 percent that typically triggers an internal bank review.[1][3]

"Nuvei turned a blind eye to blatant fraud, allowing scammers to bilk consumers out of millions," stated Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. "Today’s order requires Nuvei to return the money it helped steal and imposes strict new screening requirements to prevent this from happening again."[1]

The fraud networks operated by creating dozens of shell companies and using deceptive marketing to sell supposed health products. When consumers realized they had been scammed and initiated chargebacks through their credit card issuers, Nuvei allegedly helped the merchants mask the high return rates by spreading the transaction volume across 40 different dummy accounts, a practice known as load balancing.[2][3]

Under the terms of the settlement, Nuvei must pay the full $4.85 million, which the FTC will use to provide refunds to affected consumers over the next 12 months. Furthermore, the order strictly prohibits the company from providing payment processing services to certain high-risk merchant categories, including those selling negative-option continuity plans or utilizing deceptive marketing tactics.[1][4]

Beyond the financial penalty, the agreement mandates a comprehensive overhaul of Nuvei's merchant screening and monitoring protocols. The company is now required to conduct rigorous background checks on prospective clients, monitor existing accounts for suspicious activity, and immediately terminate services for any merchant whose chargeback rate exceeds 2.5 percent for two consecutive months.[4][5]

This enforcement action signals a broader regulatory crackdown on the payment processing industry under the FTC's Safeguards Rule. Compliance analysts note that the Nuvei settlement establishes a clear precedent: processors can no longer claim ignorance when their merchant clients engage in systematic consumer deception, shifting the liability directly onto the financial intermediaries.[3][5]

The $4.85 million will be distributed to victims identified in the FTC's investigation. For the broader e-commerce ecosystem, the mandate requires payment processors to implement these enhanced screening systems by the end of the 2026 fiscal year, fundamentally altering the risk calculus for third-party financial intermediaries operating in the United States.[2][5]