UK-based payment processor Paddle.com and its U.S. subsidiary will pay $5 million to settle Federal Trade Commission (FTC) allegations that it facilitated deceptive tech support scams targeting U.S. consumers, including vulnerable older adults.
According to the FTC, Paddle failed to properly vet high-risk merchants, enabling fraudulent operators such as Restoro, Reimage, and PC Vark to exploit its platform. These schemes used fake virus alerts and impersonated companies like Microsoft and McAfee to pressure consumers into buying unnecessary software or tech support. In many cases, victims were charged repeatedly via unauthorized subscriptions.
From April 2020 to June 2023, Paddle processed over $37 million for Restoro and Reimage and more than $12.5 million for PC Vark, despite widespread consumer complaints and high chargeback rates. Internal Paddle communications reportedly revealed that the company was aware of the scams and attempted to conceal fraudulent activity to avoid scrutiny from banks and card networks.
The FTC also found that Paddle allowed merchants to charge consumers before completing “Know Your Customer” (KYC) checks and violated credit card network rules by operating as an unregistered payment aggregator for thousands of merchants.
As part of the settlement, Paddle is:
- Banned from processing payments for tech-support telemarketers.
- Prohibited from assisting deceptive merchants or helping them avoid fraud detection.
- Required to conduct proper client screening and monitoring.
- Obligated to disclose subscription terms, obtain informed consent, and provide easy cancellation.
In response, Paddle stated it does not support deceptive practices and emphasized that it only processed initial software transactions, not telemarketing calls.
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How to Stay Safe from Tech Support Scams:
- Ignore pop-ups claiming your PC is infected.
- Do not trust unsolicited calls from “Microsoft” or “McAfee.”
- Avoid downloading software from unknown sites or clicking on scareware ads.
- Use ad blockers and security tools to prevent scam redirects.
