FTC fines payment processor Cliq $6.5 million for actions that enabled consumer fraud

A Nevada federal court has held payment processor Cliq (also known as CardFlex/Cliq) and two executives in civil contempt of a 2015 FTC order and imposed $6.5 million in sanctions for violations that enabled merchants to defraud consumers.

What the court just did

• U.S. District Judge Miranda Du (D. Nev.) found that Cliq and its executives violated multiple provisions of a 2015 stipulated final order obtained by the FTC in an earlier enforcement action.

• As a remedy for the harm caused by those violations, the court imposed $6.5 million in civil contempt sanctions against the company and the individual defendants.

• The court declined the FTC’s request to appoint a receiver to take over Cliq or to issue an industry ban against its CEO Andy Phillips and CTO John Blaugrund, even while finding them in contempt.

How Cliq’s conduct enabled fraud

• The original 2015 order stemmed from allegations that Cliq illegally processed about $26 million in unauthorized charges for high‑risk merchants, including merchants on Mastercard’s MATCH list.

• In the contempt proceedings, the FTC showed “clear and convincing evidence” that Cliq continued to process payments in ways that violated the order, including for merchants associated with millions of dollars in consumer fraud.

• The agency alleged that Cliq helped merchants evade bank and card‑network fraud monitoring and failed to adequately screen or terminate high‑risk clients with high chargeback rates, contrary to the order’s requirements.

How this relates to the earlier $52.9M figure

• In its contempt motion, the FTC sought $52.9 million in compensatory relief, corresponding roughly to the volume of transactions Cliq processed for a key merchant (Target Fulfillment) implicated in the alleged fraud.

• The court instead set the sanction at $6.5 million, describing that amount as “commensurate with the harm” proven on the record, which is far lower than the FTC’s requested recovery.

• Industry commentary earlier in 2026 that referenced a “$52 million FTC fine” appears to have been based on the FTC’s requested relief, not on the court’s final decision; the actual award is the $6.5 million contempt sanction.

Why it matters for payment processors

• The ruling underscores that processors can face significant follow‑on exposure if they fail to comply with underwriting, monitoring, and risk‑control obligations embedded in prior FTC orders.

• It also shows the limits of the court’s willingness to grant structural remedies: while the judge agreed Cliq’s conduct facilitated “millions of dollars of fraud,” she still declined to impose a receivership or industry bans, opting instead for a monetary sanction.