The Federal Trade Commission (FTC) has taken legal action against Cliq, Inc., previously known as Cardflex, Inc., and its executives, CEO Andrew Phillips and Chief Technology and Security Officer John Blaugrund, for allegedly violating a 2015 order. The FTC's motion, filed in the U.S. District Court for Nevada, seeks to hold the operators in contempt for their systematic disregard of the order's requirements.

According to the FTC, Cliq has processed payments for merchants that were explicitly prohibited by the 2015 order, including those with high chargeback rates. The agency claims that Cliq has processed hundreds of millions of dollars in payments for at least three clients listed on Mastercard’s Member Alert To Control High (MATCH) list, which identifies merchants that have been terminated for violating card brand rules.

The FTC's allegations also include that Cliq assisted clients in evading bank and credit card network fraud monitoring programs and failed to adequately screen high-risk clients for deceptive practices. The agency argues that these actions not only violate the 2015 order but also distort the integrity of the U.S. payment system.

In light of these violations, the FTC is seeking at least $52.9 million in compensatory relief for affected consumers, a permanent ban on Phillips and Blaugrund from the payment processing industry, and the appointment of a receiver to ensure compliance with the order.