News
Paddle to Pay $5 Million After FTC Crackdown on Tech Support Scam Ties
<p data-start="282" data-end="545">Paddle.com and its U.S. branch have agreed to pay $5 million to settle Federal Trade Commission charges that the payment processor enabled shady software peddlers to scam American consumers—many of them older adults—with fake virus warnings and junk tech support.</p>
<p data-start="547" data-end="843">The settlement shines a harsh spotlight on the company’s role in a years-long grift that relied on pop-up scare tactics, subscription trickery, and weak internal controls to rake in tens of millions. The FTC says Paddle didn’t just look the other way. It had a front-row seat and still cashed in.</p>
<h2 data-start="845" data-end="871">Fake Alerts, Real Money</h2>
<p data-start="873" data-end="1193">These scams weren’t your average phishing emails. Victims were hit with flashy pop-ups impersonating Microsoft or McAfee, warning them of dire malware threats. Behind the curtain? Foreign outfits like Restoro, Reimage, and PC Vark, running high-pressure sales that had nothing to do with fixing actual computer problems.</p>
<p data-start="1195" data-end="1256">Paddle processed payments for all of them. A lot of payments.</p>
<p data-start="1258" data-end="1577">From April 2020 to June 2023, more than $37 million flowed through Paddle’s systems on behalf of Restoro and Reimage, according to the FTC’s complaint. These companies, once based in the Isle of Man before moving to Cyprus, used bogus virus scans and scare tactics to funnel people into costly and unnecessary services.</p>
<h2 data-start="1745" data-end="1784">Internal Emails Tell a Damning Story</h2>
<p data-start="1786" data-end="1904">Paddle didn’t just happen to work with shady players. The complaint says its employees knew exactly what was going on.</p>
<p data-start="1906" data-end="2136">Internal communications reportedly showed staff acknowledging the deception, the impact on older adults, and the need to avoid drawing too much attention from banks. In some cases, the company even took steps to keep things quiet.</p>
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<p data-start="2140" data-end="2202">Here’s what the FTC says Paddle did to stay under the radar:</p>
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<p data-start="2207" data-end="2327">Used chargeback prevention services like Ethoca and Verifi to quietly refund consumers before disputes became official</p>
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<li data-start="2330" data-end="2372">
<p data-start="2332" data-end="2372">Avoided reporting accurate fraud rates</p>
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<li data-start="2375" data-end="2457">
<p data-start="2377" data-end="2457">Let merchants start charging U.S. customers without verifying their identities</p>
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<li data-start="2460" data-end="2537">
<p data-start="2462" data-end="2537">Allowed over half a million dollars to be processed without KYC documents</p>
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<p data-start="2539" data-end="2591">If that sounds like negligence, the FTC would agree.</p>
<p data-start="2539" data-end="2591"><a href="https://www.theibulletin.com/wp-content/uploads/2025/06/fake-virus-pop-up-scam-computer-screenshot.jpg"><img class="aligncenter size-full wp-image-57704" src="https://www.theibulletin.com/wp-content/uploads/2025/06/fake-virus-pop-up-scam-computer-screenshot.jpg" alt="fake virus pop-up scam computer screenshot" width="1064" height="793" /></a></p>
<h2 data-start="2593" data-end="2627">Bending (or Breaking) the Rules</h2>
<p data-start="2629" data-end="2790">The complaint goes further, accusing Paddle of functioning like a stealth payment aggregator—one that bypassed card network rules and dodged proper registration.</p>
<p data-start="2792" data-end="3093">Visa and Mastercard have specific guidelines for payment facilitators. You can’t just let anyone process transactions through your platform without disclosing who they are. But the FTC says Paddle did exactly that, sometimes letting thousands of undisclosed merchants run transactions behind its name.</p>
<p data-start="3095" data-end="3297">The regulator claims Paddle violated card network rules by not screening merchants properly or registering as a facilitator. That means higher risk of fraud, more chargebacks, and little accountability.</p>
<p data-start="3299" data-end="3523">In one particularly brazen instance, Paddle reportedly tried to shield itself from potential lawsuits by asking PC Vark to sign indemnity agreements—essentially passing the buck for consumer claims back to the scam operator.</p>
<h2 data-start="3525" data-end="3545">What Happens Now?</h2>
<p data-start="3547" data-end="3804">The FTC settlement imposes strict new rules on Paddle going forward. No more processing for tech support telemarketers. No more looking the other way when merchants scam their customers. And definitely no more flying under the radar with unverified clients.</p>
<p data-start="3806" data-end="3855">Here’s a quick breakdown of the settlement terms:</p>
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<th data-start="3857" data-end="3899" data-col-size="sm">Settlement Requirement</th>
<th data-start="3899" data-end="3974" data-col-size="md">Details</th>
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<td data-start="4092" data-end="4133" data-col-size="sm">Financial Penalty</td>
<td data-start="4133" data-end="4207" data-col-size="md">$5 million to be paid by Paddle</td>
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<td data-start="4208" data-end="4249" data-col-size="sm">Tech-Support Ban</td>
<td data-start="4249" data-end="4323" data-col-size="md">No longer allowed to process payments for tech-support telemarketers</td>
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<td data-start="4324" data-end="4365" data-col-size="sm">Merchant Oversight</td>
<td data-start="4365" data-end="4440" data-col-size="md">Must screen and monitor clients, report deceptive behavior</td>
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<td data-start="4441" data-end="4482" data-col-size="sm">Subscription Transparency</td>
<td data-start="4482" data-end="4557" data-col-size="md">Must disclose recurring charges clearly and obtain informed consent</td>
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<td data-start="4558" data-end="4599" data-col-size="sm">Cancellation Rules</td>
<td data-start="4599" data-end="4674" data-col-size="md">Consumers must be given easy, accessible cancellation options</td>
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<h2 data-start="4760" data-end="4778">Paddle Responds</h2>
<p data-start="4780" data-end="4911">After the FTC published the settlement, Paddle issued a public statement acknowledging the deal and attempting some damage control.</p>
<p data-start="4913" data-end="5122">The company said it shares the FTC’s distaste for deceptive practices and emphasized that it didn’t process any payments for the actual phone-based telemarketing itself—only for the initial software downloads.</p>
<p data-start="5124" data-end="5263">That said, Paddle also noted the settlement reaffirms its existing policies, which prohibit doing business with companies accused of fraud.</p>
<p data-start="5265" data-end="5492">Still, critics aren&#8217;t convinced this was just a case of oversight. The paper trail seems to suggest deliberate decisions were made, including efforts to minimize visibility and keep fraud levels under bank detection thresholds.</p>
<h2 data-start="5494" data-end="5520">Advice for Staying Safe</h2>
<p data-start="5522" data-end="5742">These scams aren’t going away anytime soon, and regulators can’t catch everything. So it’s worth repeating a few hard rules to stay protected—especially if you&#8217;re helping friends or relatives who might not be tech-savvy.</p>
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<p data-start="5746" data-end="5867">Microsoft, McAfee, or any legitimate antivirus provider will never send pop-up warnings or call you out of nowhere.</p>
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<p data-start="5870" data-end="5981">Don’t trust alerts that claim your system is infected unless they come from software you knowingly installed.</p>
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<p data-start="5984" data-end="6074">Never pay for software or support over the phone from a number you didn’t dial yourself.</p>
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<p data-start="6077" data-end="6152">Use browser ad blockers and security software to avoid redirection traps.</p>
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<p data-start="6155" data-end="6245">Check your credit card statements often, and dispute any suspicious charges immediately.</p>
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</ul>
<p data-start="6247" data-end="6342">It’s always the same playbook: create fear, sell the cure, keep charging until someone notices.</p>
<h2 data-start="6344" data-end="6365">The Bigger Picture</h2>
<p data-start="6367" data-end="6505">This case isn’t just about Paddle. It’s a glimpse into how big parts of the payment ecosystem can be exploited—or even complicit—in fraud.</p>
<p data-start="6507" data-end="6682">Payment processors have a responsibility to know who they’re working with. But in the rush for volume, revenue, and partnerships, corners get cut. And consumers pay the price.</p>
<p data-start="6684" data-end="6867">As more commerce moves online, these regulatory battles are only going to heat up. The FTC is making it clear that anyone facilitating fraud, even indirectly, can be held accountable.</p>
<p data-start="6869" data-end="6962">And for companies like Paddle, that’s a message delivered with a $5 million invoice attached.</p>

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