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payment activity, fraud and other red flags; it also monitors
the Mastercard Merchant Online Status Tracking system.
A 'barrage' of CIDs

Nonetheless, CMS alleges, that for the past two years, the
FTC has directed numerous civil investigative demands
(CIDs) to CMS "seeking vast amounts of information
relating almost entirely to a handful of business which
CMS and its sponsoring banks ceased working with
years ago." In response, CMS has produced over 45,000
ISO suit aims to documents – totaling over 475,000 pages – responded
to numerous interrogatories, and produced multiple
employees for depositions.
check the FTC CMS contends the evidence produced to the FTC shows:

By Bradley O. Cebeci CMS declined applications for 21 merchants responsive
to the CID (responsive merchants); responsive merchants
Rome & Associates were 3 percent of CMS' total merchants in 2011, declining
to only 0.5 percent in 2016 and 0.08 percent in 2017; by 2016
espite the DOJ's abandonment of Operation and 2017, less than 0.1 percent of CMS' processing volume
Choke Point in 2017, the Federal Trade was for responsive merchants; CMS terminated the
Commission has continued to treat ISOs as overwhelming majority of responsive merchants before
D gatekeepers to the payments system, threaten- any regulator filed a complaint or subpoenaed CMS; and,
ing them with liability where they fail to adequately police of the 37 responsive merchants later involved in FTC
their merchants – while denying this policy publicly. enforcement actions, CMS had terminated 34 prior to the
Thus, one ISO took the offensive and initiated a ground- time of suit. Nonetheless, the FTC was not satisfied.
breaking, preemptive strike against the FTC rather than FTC threatens suit
allowing itself to fall victim to the FTC's tactics.
CMS alleges that, on Feb. 4, 2019, FTC staff informed CMS
On Dec. 5, 2019, Complete Merchant Solutions LLC filed they planned to recommend enforcement action and sent
suit against the FTC in the federal district court of Utah. CMS' lawyers a proposed complaint and consent order.
The complaint seeks a declaration and injunction to stop The proposed complaint's theory is that CMS "failed to
the FTC from engaging in conduct CMS alleges "is not adequately screen and monitor its merchant-clients," and
only unfair and harassing but also far beyond the express thereby misled its sponsoring banks. CMS stated the FTC's
limitations of its jurisdiction and enforcement powers." proposed consent order directed CMS to:
One of the good guys • Terminate all businesses that use telephones to

CMS is an ISO for acquirers Commercial Bank of induce the purchase of goods or services;
California, Chesapeake Bank, Deutsche Bank, Merrick • Terminate all businesses that represented that
Bank and Wells Fargo. From soon after its founding in their goods or services would help consumers earn
2008, CMS focused on serving ecommerce businesses income from home, obtain training or education on
and other startup technology companies. CMS has grown how to establish a business or make money from a
from a tiny startup to a highly successful company. CMS business, obtain employment for an upfront fee, or
has won several awards, been recognized nationally obtain government grants or government income,
and regionally, and attracted investment from blue-chip benefits, or scholarships;
equity funds. It provides work for nearly 300 employees
and independent contractors, while serving more than • Terminate all businesses that involve a subscription
5,500 merchant accounts that produce over $3 billion in model where consumers have to tell the business to
payments annually. cancel their subscription (that is, every subscription
product); and
According to its complaint, CMS has, since 2013,
maintained a chargeback rate well below the 1 percent • Engage in heightened screening of "High Risk
mark. In 2018, CMS' chargeback rates were just .58 percent Client[s]," a category defined as covering any
by dollar and .23 percent by count. CMS employs rigorous merchant with more than 15 percent card-not-
underwriting practices, which have led it to decline present transactions, more than $200,000 in card-
approximately 16 percent of merchant applications since not-present transactions a year, or any merchant that
2013. CMS also subscribes to costly merchant-monitoring sells discount buying clubs, foreclosure protection
tools, including G2 and TSYS Fraud, to identify suspicious or guarantees, lottery sales or sweepstakes, medical

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