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"
The FTC sent warning letters to 12 companies offering 'nudify' tools that generate nonconsensual intimate images, for failing to comply with the TAKE IT DOWN Act (TIDA) by not providing a mechanism for victims to request removal of such content. The letters urge immediate compliance with TIDA, which requires platforms to remove nonconsensual intimate images within 48 hours of a valid request. Noncompliant companies may face future legal action and civil penalties of up to $53,088 per violation.
The FTC began enforcing the TAKE IT DOWN Act on May 19, 2026, a law requiring covered platforms to establish a process for victims to request removal of nonconsensual intimate images and delete such content within 48 hours of a valid request. The agency launched a consumer complaint portal, issued compliance guidance for businesses and consumers, and sent reminder letters to major platforms including Meta, TikTok, and X about their obligations under the law. No specific penalties or enforcement actions against individual companies were announced in this release.
$6.5M
A federal court held Cliq Inc. and its executives Andrew Phillips and John Blaugrund in civil contempt for multiple violations of a 2015 FTC order requiring the payment processor to prevent enabling consumer fraud. The court found the defendants facilitated fraud by processing transactions for high-risk merchants, avoiding fraud monitoring, failing to conduct required underwriting, and ignoring chargeback thresholds. The court imposed $6.5 million in civil contempt sanctions against the defendants.
$795.8M
The FTC and State of Nevada settled charges with lead defendants of the IM Mastery Academy MLM scheme, including Chris and Isis Terry and their affiliated companies, over false earnings claims used to promote financial training programs and a multi-level marketing venture. The stipulated order imposes a $795.8 million judgment, with defendants surrendering nearly $90 million in assets including luxury real estate, vehicles, jewelry, and a yacht, totaling over $100 million with prior judgments from other involved defendants. The order also bans defendants from selling trading-training services, prohibits false earnings claims, and restricts deceptive practices including negative-option misrepresentations and telemarketing violations.
The FTC and State of Illinois, via the Department of Justice, filed a complaint against B.E.S.T. GDR LLC (d/b/a Premium Home Service) and its owner Yosef Bernath for creating thousands of fake home repair business listings with fabricated five-star reviews to deceive consumers. The defendants allegedly routed consumer calls to unqualified representatives, arranged for unlicensed technicians, and violated the FTC Act, Reviews and Testimonials Rule, Gramm-Leach-Bliley Act, and Illinois consumer protection laws. No monetary penalty has been imposed yet as the case is in initial filing stages.
Federal Trade Commission Chairman Andrew N. Ferguson sent letters to over a dozen major technology companies reminding them of their obligation to comply with the Take It Down Act (TIDA) by May 19, 2026. TIDA requires covered platforms to establish a process for victims, including children, to request removal of nonconsensual intimate images, with takedown of content and all identical copies required within 48 hours of a valid request. The FTC also issued supplemental guidance to help companies prepare for compliance and warned that it will monitor and enforce violations of the law.