FTC bans UK processor from U.S. tech-support vertical

U.K. payment processor Paddle.com Market Ltd. and its subsidiary, Paddle.com Inc. (based in Delaware), will pay $5 million and is permanently banned from processing payments for tech-support telemarketers under a settlement reached with the Federal Trade Commission on June 16 2025.

The FTC had alleged that Paddle abused the U.S. credit-card system by enabling access by deceptive foreign operators, costing American consumers, "including older adults," millions of dollars, according to the FTC complaint.

Paddle operates as a merchant of record, primarily for SaaS, digital products and app-based businesses. It claims over 6,000 customers.

The errant telemarketers sold bogus "diagnostic" software and deceptively pitched costly computer repair services from offshore telemarketing call centers. "Some of these schemes have impersonated well-known companies such as Microsoft or McAfee to perpetrate their scams and phishing attacks," the complaint stated.

What's more, Paddle was well aware that the firms used deceptive advertisements, and even helped the schemers to evade scrutiny and detection by banks and the card networks, the complaint alleged. Paddle also harmed consumers by enrolling them in and charging them for tech support subscription plans that automatically renewed without clearly disclosing the fact that the fees would recur, according to the complaint.

"Paddle provided foreign-based tech-support schemes with access to the U.S. payment system, allowing these companies to harm consumers," said Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection. "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."

The FTC alleged that Paddle violated the FTC Act, the Telemarketing Sales Rule, and the Restore Online Shoppers' Confidence Act. In March 2024, Paddle's client, Restoro-Reimage, paid $26 million to settle charges it violated the FTC Act and the Telemarketing Sales Rule. The $5 million Paddle is required to pay will be used to supplement the redress for consumers who were harmed by the Restoro-Reimage tech support scheme.

Misrepresentation of transactions

According to the FTC complaint, Paddle opened merchant accounts claiming to be the merchant of record or software reseller, then used the accounts to process card payments from U.S. consumers on behalf of numerous unrelated third-party merchants. In doing so, it misrepresented or obscured the nature of the underlying transactions.

It also failed to conduct "effective screening and monitoring" of the sellers it onboarded, the FTC complaint alleges. This led to clients racking up excessive chargebacks, which because of Paddle's payment aggregation practices evaded the card networks' and acquirers' detection and scrutiny, according to the complaint.

Permanently bans

Under the proposed settlement order announced by the FTC, Paddle and its U.S. subsidiary cannot process payments for tech-support merchants that engage in telemarketing or use pop-up messages about computer security or performance.

What's more it is:

• Prohibited from assisting deceptive merchants or engaging in any tactic to avoid fraud or risk-monitoring programs established by banks or card networks;

• Required to implement effective client screening and monitoring, and provide periodic reporting about merchant-clients' transactions to Paddle's payment-services providers; and

• Required to clearly and conspicuously disclose the terms of any subscription it processes, get consumers' express informed consent to subscriptions, and provide consumers with a simple way to cancel and prevent recurring charges.

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