Paddle’s Agreement with the Federal Trade Commission (FTC)

On June 16 2025, Paddle Market Ltd (and its U.S. subsidiary, Paddle.com, Inc.) and the U.S. Federal Trade Commission agreed to a settlement order that memorializes many of Paddle’s existing risk processes and governance.  It also establishes an updated reporting framework that will provide additional visibility to Paddle’s partners.

The FTC’s complaint alleges that between 2017 and 2023, two of the 6,000 digital product companies that Paddle serves had participated in deceptive telemarketing upsell practices for their tech support products.

Whilst Paddle did not process any payments for deceptive telemarketing practices, Restoro & Reimage were able to bypass our controls at the time.  We do not wish to profit from our association with these two companies, and so the settlement we have agreed also includes a monetary amount of $5m.

An initial Complaint was drafted by the FTC in August 2024. Following the FTCʼs lengthy review of Paddleʼs current business practices, we have agreed to a settlement agreement with the agency. This agreement does not call for any material changes to Paddleʼs current business model. In fact, it memorializes many of Paddle’s existing risk processes and risk governance.

In March 2024, the FTC settled a case against Restoro & Reimage for $26m.  The FTC alleged that Restoro Cyprus Limited and Reimage Cyprus Limited tricked consumers into signing up for computer repair services through deceptive marketing.

Paddle had acted as one of several resellers of Restoro & Reimage’s software products from 2020 to 2023.

The FTC acknowledged that Paddle did not process any deceptive telemarketing transactions. But Paddle did resell the initial software product, which the FTC alleges the companies then used to conduct telemarketing upselling outside of Paddle. 

Much of our dialogue with the FTC has been about why Paddle did not offboard Restoro and Reimage sooner. Paddle offboarded these companies in 2023; the FTC brought its own action against those companies in 2024. 

The FTC asserted that Paddle received several complaints from consumers about these companies before we offboarded them. 

Our records show that the refund rates for Paddle’s sales of Restoro & Reimage prior to offboarding were lower than industry average for software, and customer satisfaction scores were above 90%.  And whilst their chargeback rates did exceed the industry average for several months, consumers mostly cited reasons unrelated to deceptive telemarketing. Fewer than 0.0001% of Restoro & Reimage consumers raised concerns about fraud to Paddle.

While we do not agree with the allegations in the complaint, we understand the FTC’s concern and with hindsight, we wish we had offboarded them sooner.

Paddle does not wish to profit from its association with these two companies, and so the settlement includes a monetary amount of $5m.

Following the FTC’s lengthy review of Paddle’s current business practices, this settlement does not call for any material changes to Paddle’s current business model. 

As the sophistication of bad faith actors around the world has evolved, so too has Paddle’s risk, compliance and governance capability. And so the settlement order memorialises many of Paddle’s existing processes to ensure we maintain the high bar we have set. 

Under the order:

• We will continue to invest in our ability to identify, screen and monitor higher risk companies, and investigate those that breach normal risk thresholds
• We will continue to ensure that any products that have a negative option feature (automatic enrollment) clearly disclose the terms, record the buyer’s consent, and provide a simple way to cancel
• We will continue to prohibit the resale of technical support products that have upsell via telemarketing and misleading pop-ups
• We will develop an updated reporting framework that will provide additional visibility to Paddle’s partners (e.g. PSPs, Card Schemes)

For several years, Paddle has banned certain categories of tech-support companies from joining Paddle - this agreement confirms we will continue that policy.

Most of the settlement agreement is effective from the date of the signed order, with some requirements coming into effect at later dates.

No. Paddle is not admitting to any of the allegations in the complaint except for those limited formalities necessary to establish jurisdiction. The settlement agreement memorializes many of Paddle’s existing business practices, and thus Paddle has decided to enter into the settlement to focus on the future and avoid needless litigation. Paddle does not wish to profit from its association with these two companies, and so the settlement includes a monetary amount of $5m.

We appreciate that governments around the world will continue to consider safe online commerce as a high priority, and we share that priority. At Paddle, our purpose from day one has been to help companies distribute their innovative digital products to consumers all around the world - in an easy, safe and compliant way. This is our core value proposition. 

We believe that a coordinated response to the threats posed by bad faith actors is the best way to protect consumers. And, we believe in continually improving the methods used to detect bad acting. This agreement with the FTC reflects these principles, and we believe this will have a positive impact for all stakeholders.

We will continue investing to build an enduring business for the millions of consumers and thousands of digital product companies we serve.