Penalty Amount
$6,500,000
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.
The U.S. District Court for Nevada imposed $6.5 million in civil contempt sanctions against Cliq Inc., formerly Cardflex Inc., and its operators Andrew Phillips and John Blaugrund for multiple violations of a 2015 federal court order, including facilitating fraud, failing to conduct required underwriting, and ignoring chargeback thresholds.
In-house teams should review vendor agreements with payment processors and merchant services providers, focusing on clauses related to underwriting requirements, chargeback thresholds, and fraud/risk monitoring obligations. Specifically, check for requirements that processors conduct mandatory business information verification, screen for shell companies, and comply with MATCH list (high-risk merchant) exclusions. Additionally, review clauses governing chargeback limits, mandatory reporting of suspicious merchant activity, and prohibitions on facilitating transactions for unverified or high-risk merchants. Merchant agreements should also be reviewed to ensure they require merchants to provide accurate business information and prohibit shifting transactions between closed and active accounts to evade monitoring.
Entity
Cliq Inc.
Industry
Financial ServicesOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2026/05/federal-court-holds-payment-processor-cliq-contempt-violating-ftc-order
Cardflex ContemptOrder
https://www.ftc.gov/system/files/ftc_gov/pdf/Cardflex-ContemptOrder.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Cliq Inc, formerly known as Cardflex Inc."
"$6.5 million"
"May 13, 2026"
"the court determined the defendants violated multiple core provisions of the 2015 federal court order by facilitating fraud on behalf of several scammers."
"the court imposed $6.5 million in civil contempt sanctions against the defendants."
"Assisted and facilitated two groups of merchants in avoiding fraud and risk monitoring programs, including by processing so-called “friendly” transactions to mask true chargeback rates and helping a group of merchants both process under different names and shift transactions from closed accounts to other live accounts."
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.
$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.
The FTC settled charges with data broker Kochava, Inc. and its subsidiary Collective Data Solutions (CDS) over allegations that they sold precise location data from hundreds of millions of mobile devices without consumer consent, enabling tracking of visits to sensitive locations like reproductive health clinics and places of worship. The settlement prohibits the companies from selling or sharing sensitive location data without affirmative express consumer consent, and imposes compliance requirements including a sensitive location data program, supplier consent assessments, incident reporting, and data retention schedules. No monetary penalty was imposed.