The First American Payment Systems FTC settlement is now providing refunds to businesses that were wrongly charged expensive early termination fees. The Federal Trade Commission (FTC) has taken action against First American Payment Systems d/b/a Merimac Capital for deceptive practices. If your business was enrolled with First American Payment Systems between June 2017 and April 2020 and was charged an early termination fee, you may be eligible for a refund from a total fund of more than $2.6 million.
In this guide, we explain the background of the case, detail the claim process, outline potential refund amounts, and provide key eligibility criteria and deadlines. At usesparrow.com, we simplify the claim process, helping you file a claim quickly—whether directly via the official website or through our user-friendly platform. Read on to learn everything you need to know about the First American Payment Systems FTC settlement.
Detailed Background of the Case
How It All Began
In recent years, the Federal Trade Commission (FTC) has intensified efforts to protect businesses from deceptive practices in the payment processing industry. The First American Payment Systems FTC settlement emerged from an investigation into the company’s billing practices. First American Payment Systems, a payment processing company that integrates, sells, and accepts payments, was accused of misleading businesses by falsely advertising its fee structure. Specifically, the FTC alleged that the company misrepresented its costs and later charged expensive early termination fees when merchants ended their contracts.
Allegations and Misleading Practices
According to the FTC’s complaint, First American Payment Systems made false claims regarding its fees and costs. The company advertised favorable pricing without clearly disclosing that an early termination fee would be imposed if businesses ended their service agreements. Many affected businesses—particularly those with limited English proficiency—were deceived by these practices. The FTC argued that these misleading representations and hidden charges resulted in unjust financial burdens on businesses that relied on First American Payment Systems for their payment processing needs.
The complaint detailed that the company targeted merchants who might not fully understand the complex fee structures, leading them to incur unexpected costs. As a result, these businesses were forced to pay termination fees that far exceeded their expectations, compounding their financial difficulties and undermining trust in the payment processing industry.
Legal Proceedings and Settlement Terms
After a thorough investigation, the FTC filed a lawsuit against First American Payment Systems (operating as Merimac Capital) under the case titled Federal Trade Commission v. First American Payment Systems d/b/a Merimac Capital, et al., Case No. 4:22-cv-00654, in the U.S. District Court for the Eastern District of Texas. The court found substantial evidence of deceptive practices and, under its order entered on July 19, 2022, mandated that the company cease its misleading fee disclosures.
The settlement requires the defendants to pay a total of $4.9 million and to stop their deceptive practices immediately. Of this amount, $2.6 million is allocated to directly refund businesses that were charged these high early termination fees. The settlement is designed to compensate affected businesses based on the fees they paid and the number of valid claims they file.
Impact on Businesses
For the 5,588 businesses identified as affected, the settlement means that they will receive checks totaling more than $2.6 million. Although individual payment amounts vary based on specific fee overcharges and the number of claims submitted, this action by the FTC represents a significant step toward restoring financial fairness and transparency in the payment processing industry. Not only does the settlement offer monetary relief, but it also serves as a stern reminder to all companies to maintain clear and honest fee structures in their marketing and billing practices.
By addressing these deceptive practices, the First American Payment Systems FTC settlement helps protect businesses from future misconduct. The case emphasizes the importance of regulatory oversight and transparency, ensuring that companies cannot mislead their customers with hidden fees and unclear terms. Ultimately, the settlement underscores the FTC’s commitment to holding companies accountable and providing recourse for affected consumers and businesses alike.
How to File a Claim
Filing a claim for the First American Payment Systems FTC settlement is simple and straightforward. Here’s how you can file your claim:
- Visit the Official Settlement Website:
Go to the official settlement page at FTCFirstAmericanPaymentSystemsSettlement for complete instructions. - Complete the Online Claim Form:
Fill out the claim form with your business details and include the claim number received via email.- No proof of purchase is required.
- Ensure that all your information is accurate.
- Submit Your Claim Before the Deadline:
All eligible businesses must file their claim by May 7, 2025. Late submissions will not be accepted. - Track Your Claim:
After submission, use the online system to monitor your claim status and receive updates.
Important Deadlines
Adhering to deadlines is crucial to ensure you receive your refund. Please note the following dates:
- Claim Form Deadline:
All eligible businesses must submit their claim form by May 7, 2025. Make sure to file your claim on time to avoid disqualification. - Refund Distribution Timeline:
Refund payments are expected to be disbursed in 2026 once the claims have been processed and verified. - No Exclusion or Objection Deadline:
This settlement does not have a separate exclusion or objection deadline. Focus solely on submitting your valid claim by the deadline.
Keeping track of these deadlines will help ensure that your claim is processed without any issues.
Benefits of Using Sparrow for Your Claim
Navigating the claims process can be daunting, but Sparrow is designed to make it simple and stress-free. Here’s how Sparrow can help you:
- User-Friendly Interface:
Sparrow’s platform guides you through each step of the claim process with clear instructions and intuitive navigation. - Real-Time Claim Tracking:
Easily monitor your claim status and receive prompt updates throughout the processing period. - Expert Guidance:
Sparrow offers detailed FAQs and customer support to help answer any questions and ensure that your claim is accurate. - Secure Processing:
Your personal and business data is protected with robust security measures, ensuring safe handling of your information. - Time-Saving:
With Sparrow, you can file your claim quickly, avoiding the complexity of navigating the official settlement website.
Using Sparrow means you can file your claim with confidence and ease, ensuring that you do not miss any critical deadlines and that your refund is processed as smoothly as possible.
If your business meets these requirements, you are eligible to file a claim for a refund. If you are unsure about your eligibility, check the FAQ section on the official settlement website or use Sparrow’s resources to verify your status.
Who Is Eligible to File a Claim?
Eligibility for the First American Payment Systems FTC settlement is clearly defined. To be eligible, your business must meet the following criteria:
- Enrollment Period:
Your business must have been enrolled with First American Payment Systems between June 2017 and April 2020. - Early Termination Fee:
Your business must have been charged an early termination fee—fees that were not clearly disclosed at the time of signing up. - Claim Notification:
Eligible businesses should have received a claim number via email. This serves as your notification and verification for eligibility.
How Much Can You Receive?
Refund amounts under the First American Payment Systems FTC settlement vary depending on how much your business was overcharged. Here’s an overview:
- Total Settlement Fund:
The total refund pool is over $2.6 million. - Individual Refunds:
Payment amounts depend on the specific termination fees your business paid and the number of valid claims filed.- There are no fixed payment estimates at this time.
- Refunds are calculated on a pro-rata basis.
- Expected Disbursement:
Payments from the settlement are anticipated to be issued in 2026 after the claims have been processed and verified.
It’s important to note that the exact amount you receive will be determined during the claims verification process. Stay informed by reviewing any updates provided on the official settlement website.
Conclusion
The First American Payment Systems FTC settlement represents a significant opportunity for businesses that were misled by deceptive fee practices and charged exorbitant early termination fees. If your business was enrolled with First American Payment Systems between June 2017 and April 2020 and incurred these hidden fees, you may be entitled to a refund from a total settlement fund of over $2.6 million. In this article, we have provided a detailed background on how the case originated, the allegations against the company, and the legal proceedings that led to the settlement. We have also outlined the step-by-step process for filing a claim—highlighting how platforms like Sparrow can simplify the process—as well as important eligibility criteria and deadlines.
Staying informed and acting promptly is essential to secure the refund your business deserves. The FTC’s intervention and subsequent settlement serve as a reminder of the importance of transparency in billing practices. Whether you choose to navigate the official website or use Sparrow’s streamlined services, make sure you complete your claim on time to avoid missing out on your refund.
