UK fintech Paddle will pay $5 million to settle US allegations of unfair payment processing practices. The company will also be permanently banned from processing payments for tech-support telemarketers, according to the Federal Trade Commission (FTC).
The FTC’s complaint claimed that Paddle processed payments for deceptive tech-support schemes targeting US consumers, including older adults. The payments processor was accused of misusing the credit-card system, allowing deceptive foreign operators access, which reportedly cost consumers millions of dollars.
Christopher Mufarrige, director of the FTC Bureau of Consumer Protection, stated, “The FTC will hold accountable payment companies that knowingly facilitate payments for scammers or look the other way when faced with red flags about their clients’ conduct.”
In a separate case, MoneyGram will pay a $250,000 fine to settle a New York state lawsuit over violations of a federal rule designed to simplify remittances. This settlement follows the Consumer Financial Protection Bureau’s withdrawal from the civil case, amid its ongoing reduction in enforcement activities.