FTC Moves for Contempt and $52.9 Million in Consumer Redress Over Payment Processor Misconduct

The Federal Trade Commission has asked a federal court in Nevada to hold the operators of payment processor Cliq, Inc. in contempt, alleging they violated a standing 2015 FTC order and seeking at least $52.9 million in compensation for affected consumers. The request, submitted in January 2026, is aimed at former Cardflex, Inc. and two of its top executives, Andrew Phillips and John Blaugrund, whom the agency accuses of systematically disregarding fraud-prevention duties while continuing to process risky transactions.

According to the FTC’s filing, Cliq repeatedly failed to carry out required safeguards designed to prevent fraud, including processing payments for merchants that appeared on Mastercard’s Member Alert To Control High (MATCH) list, a registry reserved for businesses that have been terminated for serious rule violations such as excessive chargebacks. The agency also asserts that the company knowingly handled payments for clients with elevated chargeback levels, helped those merchants sidestep bank and card-network risk controls, and neglected to perform reasonable screening of high-risk customers before allowing them to use its services.

“Cliq and its operators flagrantly violated an FTC order requiring reasonable steps to prevent and detect fraud,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “We will not hesitate to hold accountable companies that ignore red flags and distort the honest functioning of the U.S. payment system.”

The commission maintains that Cliq processed hundreds of millions of dollars in transactions for at least three merchants that were already on the MATCH list, even though their inclusion signaled prior terminations for compliance failures. Regulators further allege that the processor failed to adequately monitor sales activity for indications of deception and kept accounts open for clients despite unmistakable warning signs of fraudulent conduct.

Beyond seeking $52.9 million to reimburse consumers, the FTC is asking the court to impose sweeping remedies. These include permanently banning Phillips and Blaugrund from working in the payment-processing industry, amending the original 2015 order to tighten and reinforce compliance obligations, and appointing a court-approved receiver to take control of Cliq’s operations.

Should the court side with the FTC, the ruling could have far-reaching consequences for the broader payment-processing sector, potentially ushering in tougher enforcement of fraud-prevention standards and compelling processors that serve high-risk merchants to adopt more rigorous screening and monitoring systems. The action reflects the agency’s continuing campaign to protect consumers from deceptive financial practices and to ensure that companies facilitating electronic payments comply with established safeguards. This report is based on information from the Federal Trade Commission, a public-domain U.S. government source, drawn from an official release.

By fLEXI tEAM