A federal judge in Nevada just found Cliq Inc., the payment processor formerly known as Cardflex, in civil contempt of a 2015 stipulated order that was supposed to keep it out of the fraud-facilitation business. The sanction: $6.5 million, a fraction of the $52.9 million the FTC wanted.
I read the FTC’s contempt announcement on this one twice, because the violations aren’t subtle. The May 2015 order required real underwriting: verify merchant identities, flag shell companies, cut off anyone tripping chargeback thresholds. The court found Cliq did none of it. It processed hundreds of millions of dollars for merchants sitting on Mastercard’s MATCH list, the high-risk registry that’s supposed to be a hard stop, not a speed bump. It also let merchants disguise chargebacks as “friendly” transactions and hop between accounts to dodge closures.
That’s the old yardstick versus the new one. In 2015, “compliance” meant paperwork. In 2026, a federal judge is treating it as a floor, not a ceiling, and punishing the gap between what the order required and what Cliq actually did.
Cliq’s press release calls the ruling a win because the court didn’t appoint a receiver or ban executives. CEO Andy Phillips says it “validates” the company’s compliance program. Reading the actual Cardflex contempt order, that’s a generous read of a finding that the company “systematically failed” its reporting obligations for years.
Worth reading the underwriting language in your own processor agreements this quarter.
— Rebecca Lauren