Penalty Amount
$52,900,000
The FTC filed a motion in federal court seeking to hold payment processor Cliq, Inc. and its operators in contempt for systematically violating a 2015 consent order. The defendants are accused of processing payments for high-risk and prohibited merchants, failing to screen for deceptive practices, and facilitating fraud avoidance tactics. The FTC is requesting at least $52.9 million in consumer relief, a permanent ban on the individuals from payment processing, and appointment of a receiver.
The FTC seeks compensatory relief of at least $52.9 million for consumers, a permanent ban on Andrew Phillips and John Blaugrund from the payment processing business, modification of the 2015 order, and appointment of a receiver to oversee Cliq's compliance.
In-house legal teams should review all vendor agreements with payment processors and customer/merchant agreements for clauses related to compliance with consent orders, fraud prevention, and merchant screening. Specifically, examine representations and warranties regarding lawful processing, obligations to implement and maintain fraud detection and transaction monitoring systems, requirements to maintain and adhere to a prohibited merchant list, and audit/cooperation clauses. Given the allegations of processing for high-risk/prohibited merchants and ignoring red flags, contracts may need amendments to include stricter underwriting standards, mandatory real-time screening against updated prohibited lists, enhanced reporting obligations, and clear termination rights for non-compliance with regulatory orders.
Entity
Cliq, Inc., Andrew Phillips, John Blaugrund
Also known as: Cliq
Industry
Financial ServicesOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-asks-court-hold-payment-processors-contempt-systematically-violating-2015-order
CardFlexMotionContempt
https://www.ftc.gov/system/files/ftc_gov/pdf/CardFlexMotionContempt.pdf
payment processors involved i works scheme settle ftc charge
https://www.ftc.gov/news-events/news/press-releases/2015/03/payment-processors-involved-i-works-scheme-settle-ftc-charges
ftc charges payment processors involved i works scheme
https://www.ftc.gov/news-events/news/press-releases/2014/08/ftc-charges-payment-processors-involved-i-works-scheme
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Cliq, Inc., formerly Cardflex, Inc., along with its operators, CEO Andrew Phillips and Chief Technology and Security Officer John Blaugrund"
"seeking at least $52.9 million in relief for consumers"
"violating their 2015 order with the agency"
"Processing hundreds of millions of dollars in payments for at least three clients on Mastercard’s Member Alert To Control High (MATCH) list"
"Failing to monitor high-risk clients’ sales and transactional activity to determine whether their businesses are engaged in practices that are deceptive"
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$1.9M
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