Alertpay.com was a payment processor that promised its small business clients that their “money (was) safe” (Source). However, those clients were disappointed in 2013 when the U.S. authorities seized funds held by the company. Alertpay ran into further challenges as its website was seized and authorities served a criminal indictment to its owners (Source).
We took the time to find out what happened to Alertpay and to its clients’ funds.
Alertpay.com was started in 2004 by brothers Firoz and Ferhan Patel. The company’s headquarters were in Montreal, Canada. The company indicated that its mission was “to simplify instant online transactions.” The payment processor declared itself as a leading platform that provided safe solutions to online payment needs. The company also claimed that it had a customer base of more than five million individuals and businesses across the world, 100 customer support staff in Canada and India, and transacted in 22 currencies. It reported that it had localized banking outlets in 46 countries (Source).
In 2012, MH Pillars announced that it was acquiring Alertpay Inc. MH is a U.K. based prepaid-card solutions supplier. Christopher Henry, then president of MH Pillars, stated that the acquisition would ensure that his company was in a position to respond to the need for e-commerce payment processing solutions in a world that is rapidly growing global. Following the acquisition, Alertpay rebranded as Payza.com (Source).
It seems that Payza’s legal problems began in November 2013 when customers started complaining about its transaction inconveniences. Payza assured its clients that their funds were safe. However, customer funds were soon frozen by the authorities. Responding to the confiscation of funds, the company told users that the disruptions were due to withholding of funds by Ultralight Financial Services. Ultralight Financial Services is a US-based licensed money transmitter, of which Payza was an agent.
After futile attempts to calm the situation, Payza advised its customers to approach their local (US) state regulators and ask those regulators to get involved. Soon, Ultralight F.S. posted a notice on their website that the U.S. Department of Homeland Security had seized all Payza funds deposited with the company (Source).
According to the March 2018 indictment, Payza was operating a fund transacting business without state licensing and intentionally transmitting money from criminal activity (Source).
The U.S. Department of Justice further accused Ferhan and Firoz of owning and operating Payza.com, Alertpay.com, and another company called Egopay.com, which together processed transactions involving more than $250 million illegally (Source).
According to the Montreal Gazette, a daily newspaper published in Montreal Canada, a conviction for this type of offense would attract a jail sentence of up to 25 years.
U.S. Authorities shut down Payza.com in March 2018, accusing the site of having links to illegal activities, including Ponzi schemes and child pornography. Immediately, visitors to the site were getting a message from the Department of Justice: “This server has been taken offline” (Source).
Following the seizure of Payza.com by the U.S. authorities, Payza’s social media platforms started directing users to a new website, www.payza.eu. The new domain restricted Payza’s services to customers outside the U.S. It defined the company as a European service (Source).
The U.S. authorities seized Alertpay.com and Payza.com. Its operators and customers no longer have access to the sites.
U.S. individual and business customer funds transacted with Payza were frozen, as a result of U.S. law enforcement agencies concluding that Payza’s clients were “largely” made up of criminals. (Source) However, the U.S. authorities are inviting legitimate clients with concerns or questions to contact the United States Attorney’s Office, District of Columbia website.
Firoz and Ferhan Patel are currently free, and reportedly negotiating a plea bargain.
Although Payza.com no longer exists, there are still alternative payment processors that small businesses can turn to for online transactions. However, from the debacle at Payza.com, it is clear that clients transacting through online payment services have to do their homework to ensure that they are dealing with legitimate businesses. It may also be a good idea to ensure that their funds are not held in a single service. You can find alternative payment processors here.
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