Paddle, the London-based fintech that provides payment services for software firms, has been hit with a $5m fine and been banned from processing payments for tech-support telemarketers by US regulators, following an allegation that it abused the US credit card system, costing consumers millions of dollars.
The fine relates to Paddle onboarding two companies over five years ago that the Federal Trade Commission (FTC) allege took part in deceptive telemarketing practices.
The FTC alleges that Paddle processed payments on behalf of the companies that targeted US consumers including older adults, costing consumers millions of dollars.
The regulator said the London–based fintech facilitated schemes that allegedly used fake virus alerts and pop-up messages to impersonate familiar brands, such as Microsoft or McAfee.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said: “Paddle provided foreign-based tech-support schemes with access to the US payment system, allowing these companies to harm consumers.
“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.”
Details of the US regulatory probe were first revealed by the website UKTN.
Paddle said the regulator pointed out that it did not process any payments for “deceptive telemarketing practices”.
Jimmy Fitzgerald, CEO at Paddle, said: “Paddle serves over 6,000 digital product companies, whose innovative technology collectively brings incredible value to consumers all around the world.
"And whilst we believe that almost all digital product companies are ‘forces for good’, it is sadly a reality that there are some bad faith actors out there.”
Paddle offers checkout, payment, subscription management, invoicing, international taxes, and financial compliance services for software firms and is backed by FTV Capital, 83North, Notion Capital, Kindred Capital.
It was valued at $1.4bn in 2022 after bagging a $200 million Series D funding round.
Would you like to write the first comment?
Login to post comments