FTC Attorneys Ask Court to Hold Payment Processors in Contempt for Allegedly Violating 2015 Order

The phrase refers to a recent FTC enforcement action in which the agency is asking a federal court to hold payment processor Cliq, Inc. (formerly CardFlex, Inc.) and two executives in contempt for allegedly violating a 2015 court order tied to earlier fraud-related allegations.​

What the FTC is alleging

• The FTC says Cliq, CEO Andrew Phillips, and CTO John Blaugrund “flagrantly” violated a 2015 order that required them to take reasonable steps to prevent and detect fraud in their payment processing business.​

• The alleged violations include processing hundreds of millions of dollars of credit card transactions for high‑risk merchants that were expressly prohibited under the order, including merchants later indicted for crimes.​

Examples of alleged misconduct

• Processing payments for at least three clients on Mastercard’s MATCH list, which flags merchants terminated for issues like excessive chargebacks.​

• Assisting clients in tactics to evade bank and card‑network fraud and risk monitoring programs, and failing to adequately screen and monitor high‑risk clients’ business practices and chargeback levels for signs of deception.​

What the FTC is asking the court to do

• Order at least $52.9 million in compensatory relief to consumers allegedly harmed by the processing activity.​

• Modify the 2015 order to permanently ban Phillips and Blaugrund from the payment‑processing industry and appoint a receiver to oversee Cliq and enforce compliance with court requirements.​

Procedural status

• The FTC’s contempt motion has been filed in the U.S. District Court for the District of Nevada, which handled the original 2015 case involving the I Works scheme and related deceptive credit‑card charges.​

• The court has not yet ruled on the contempt request; the filing seeks to enforce and strengthen the existing order based on the alleged violations.​