LAS VEGAS—A federal judge in Nevada has ordered payment processor Cliq Inc. and two of its executives to pay $6.5 million in sanctions after finding they violated a 2015 Federal Trade Commission settlement that required the company to monitor and avoid processing payments for fraudulent or high-risk merchants, Law360 said.
According to court filings and reporting by Law360, the FTC accused Cliq—formerly known as CardFlex Inc.—along with CEO Andrew Phillips and Chief Technology and Security Officer John Blaugrund, of continuing to process payments for merchants associated with deceptive practices and excessive chargebacks despite the earlier consent order. The FTC had originally sought at least $52.9 million in consumer relief, permanent industry bans for the executives and the appointment of a receiver.
The FTC alleged the company processed hundreds of millions of dollars in transactions for merchants listed on Mastercard’s MATCH high-risk database, helped clients evade fraud-monitoring programs and failed to properly screen or monitor high-risk businesses. The agency said the conduct violated provisions of the 2015 settlement tied to allegations CardFlex had processed more than $26 million in unauthorized consumer charges connected to the iWorks scheme.
While the judge imposed the $6.5-million sanction, the court reportedly declined several of the FTC’s harsher requested remedies, including permanently banning the executives from the payments industry. Cliq has denied wrongdoing and said it maintained strong compliance controls and cooperated throughout the investigation, Law360 noted.