FTC wins $6.5 million order against payment processor accused of helping scammers

A federal judge in Nevada has ordered payment processor Cliq Inc. and two of its operators to pay $6.5 million after finding they violated a 2015 federal court order designed to keep the company from helping merchants defraud consumers.

The Federal Trade Commission said the U.S. District Court in Nevada found Cliq, formerly known as Cardflex Inc., along with executives Andrew Phillips and John Blaugrund, in civil contempt for multiple violations of the earlier order. The order was entered May 13, 2026, according to the FTC.

The case is a reminder that payment processors can play a critical role in consumer fraud. Scam merchants need a way to take credit card payments. Regulators say processors that ignore red flags — or help merchants disguise them — can keep fraudulent operations alive.

“As the court concluded, Cliq and its executives assisted and facilitated scammers in avoiding fraud and risk monitoring programs and failed to conduct the 2015 order’s required underwriting,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “The court’s order should send a strong signal that the Commission will enforce its orders and continue to prioritize rooting out fraud from the American payment system.”

What the court found

According to the FTC, the court found that Cliq and its executives violated “multiple core provisions” of the 2015 order by facilitating fraud on behalf of several scam operators.

The FTC said the defendants unlawfully processed hundreds of millions of dollars in transactions for merchants on Mastercard’s Member Alert To Control High-Risk Merchants list, known as MATCH. The MATCH list is used by acquiring banks and payment networks to flag merchants that have been terminated or identified as high risk, including for excessive chargebacks or rule violations.

Chargebacks occur when consumers dispute credit card charges, often because a product was not delivered, was misrepresented or was never authorized. High chargeback rates are one of the warning signs payment processors are supposed to monitor.

The court also found that Cliq and the executives helped merchants avoid fraud and risk monitoring programs. According to the FTC, that included processing so-called “friendly” transactions to mask true chargeback rates and helping merchants shift transactions from closed accounts to other live accounts.

The FTC said the court also found the defendants failed to conduct required underwriting, including by not collecting or verifying required business information, ignoring signs of shell companies and waiving documentation requirements.

The court further concluded that Cliq processed transactions for merchants that repeatedly exceeded chargeback thresholds set by the 2015 order and failed to conduct required investigations or prepare written reports justifying continued processing. The FTC said the court found the defendants had “systematically failed” to complete those reporting obligations.

A long-running FTC case

The contempt order stems from a 2015 settlement involving Cardflex Payment Solutions, the earlier name of Cliq. That order required the company and its operators to take steps to prevent and detect fraud in payment processing.

In January 2026, the FTC asked the court to hold Cliq and its operators in contempt, accusing them of systematically violating that order. The agency sought at least $52.9 million in consumer relief, a receiver to oversee compliance and an order permanently banning Phillips and Blaugrund from the payment processing industry.

The court did not grant all of those requests. It imposed a $6.5 million civil-contempt sanction but declined to appoint a receiver or permanently ban the executives from payment processing, according to the newsletter Payments Dive.

Cliq says ruling rejected FTC’s harshest claims

Cliq presented the decision very differently, saying the court rejected what the company called the FTC’s “aggressive theories” and declined to impose the agency’s most severe requested remedies. In a company statement, Cliq said the ruling affirmed that it takes its responsibility to guard against fraudulent and illegitimate merchant accounts seriously, Yahoo Finance said.

Joanna Oliva, Cliq’s president and chief financial officer, said the court declined to appoint a receiver, ban company leaders from the payment processing industry or award the $52.9 million in compensatory relief the FTC requested.

Andy Phillips, Cliq’s CEO, said the decision validated the company’s compliance program and business practices. Cliq said it has made significant compliance investments over the past five years and pointed to external audits and reviews conducted after the FTC complaint, according to a statement on cliq.com.

But the FTC emphasized that the court did find Cliq and the executives in civil contempt and imposed a multimillion-dollar sanction for violating the 2015 order.

Why it matters to consumers

Many online scams depend on access to the payment system. A deceptive merchant can advertise fake products, bogus subscriptions or misleading offers, but it still needs banks and payment processors to move money from consumers’ credit cards into merchant accounts.

That is why payment processors are often described as gatekeepers. They are expected to screen merchants before allowing them to process payments and to monitor for warning signs such as high chargeback rates, shell companies, shifting merchant names and attempts to evade card-network rules.

When processors do not perform that role, regulators say consumers can be exposed to recurring charges, unauthorized transactions and hard-to-cancel schemes.

The FTC’s action also shows that old enforcement orders can have long tails. The 2015 order did not simply resolve the earlier case; it created ongoing obligations. The contempt ruling signals that payment processors that settle with regulators may face new penalties years later if they violate those terms.

What consumers can do

Consumers should review credit card and bank statements regularly for unfamiliar charges, especially small recurring amounts that may be easy to overlook.

If a charge is unauthorized or tied to a product or service that was misrepresented, consumers should dispute it promptly with the card issuer. Credit card disputes generally have strict timing rules, so delays can make recovery harder.

Consumers who suspect a scam can also report it to the FTC at ReportFraud.ftc.gov. Reports help regulators identify patterns, including merchants and processors that may be enabling widespread fraud.

For regulators, the Cliq case is about more than one company. It is about whether the financial plumbing of online commerce is being used to stop fraud — or to keep it running.

I kept Cliq’s response in the story so it doesn’t read as one-sided, while still making the FTC/court finding clear.