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Government Actions

Paddle Will Pay $5 Million to Settle FTC Allegations of Unfair Payment-Processing Practices and Facilitation of Deceptive Tech-Support Schemes

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

It was announced on June 16, 2025 that U.K.-based payment processor, Paddle.com Market Limited, and its subsidiary, Paddle.com, Inc., will pay $5 million and be permanently banned from processing payments for tech-support telemarketers. This settles a Federal Trade Commission action alleging that Paddle abused the U.S. credit-card system and enabled deceptive foreign operators to access it, costing consumers millions of dollars.

In a complaint, the FTC alleged that Paddle and its subsidiary processed payments for deceptive tech-support schemes that targeted U.S. consumers including older adults. The complaint charges that:

-Paddle opened merchant accounts claiming to be a “merchant of record” or software “reseller,” then used these accounts to process card payments on behalf of numerous, unrelated third-party merchants.
-Paddle enabled overseas schemes to access the credit card system and collect payments from U.S. consumers, and to evade detection by merchant banks and card networks.
-Paddle facilitated schemes, like Restoro-Reimage, that allegedly used fake virus alerts and pop-up messages to impersonate familiar brands, such as Microsoft or McAfee.
-As the “merchant of record,” Paddle charged consumers for automatically renewing subscriptions without clearly disclosing that consumers would incur recurring charges.

The FTC alleged 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 the FTC’s charges of violating the FTC Act and the Telemarketing Sales Rule. 

Under the proposed settlement order Paddle will be:

-Permanently prohibited from processing payments for tech-support merchants that engage in telemarketing or use pop-up messages about computer security or performance;
-Prohibited from assisting deceptive merchants or engaging in any tactic to avoid fraud or risk-monitoring programs established by banks or the card networks;
-Required to implement effective client screening and monitoring, and provide periodic reporting about merchant-clients’ transactions to Paddle’s payment-service providers; and
-Required to clearly and conspicuously disclose the terms of any subscription it processes, get consumers’ express informed consent to the subscription, and provide consumers with a simple way to cancel and prevent recurring charges. 

The $5 million payment Paddle is required to make under the settlement will be used to supplement the redress for consumers harmed by the Restoro-Reimage tech support scheme.