Spade Identified High-Risk Transactions Tied to Paddle Lawsuit Months Before FTC Enforcement

Long before regulators stepped in, Spade detected and flagged unusual activity tied to the scams at the center of the FTC’s recent case against payment processor Paddle. The patterns were visible, if you knew where to look.

Last month, the FTC fined Paddle $5 million and issued a permanent ban on processing payments for predatory telemarketers after finding that the company enabled a network of offshore scams targeting older adults.

These operations often impersonated known companies and convinced customers, many of whom were vulnerable or elderly, to authorize payments for fake or unnecessary services.

How these Scammers Slipped Through the Cracks

According to AARP, tech-support scams generated nearly $600 million in reported losses to people over 60 last year – and this doesn’t include the fraudulent charges that go unreported or unnoticed.

It’s the kind of scam that legacy systems were never designed to catch. The transaction values were low, the merchant names appeared legitimate, and few disputes were ever filed. But Spade saw the pattern early, using signals like irregular web presence and behavioral inconsistencies that don’t show up in traditional dashboards.

“This is a new kind of fraud — subtle, cumulative, and designed to blend in,” said Oban MacTavish, CEO of Spade. “What makes it dangerous is exactly what makes it hard to catch: it doesn’t trip a bank’s alarms until the damage is already done.”

Helping Institutions Stop the Harm Before Trust — or Deposits — Are Lost

Spade identified these signals before this enforcement action,and used them to proactively assess risk for their customers. The Paddle case highlights a growing need across the industry: institutions need better context to protect the customers who trust them, and they need this information earlier.

“This should be a turning point,” said Kevin Moss, Fintech Advisor,“If your systems rely on disputes to detect fraud, you’re already behind. What Spade surfaced early in this case shows how early visibility — into who’s actually behind a transaction and how they operate — can stop harm before it spreads. Banks and processors now have the opportunity to lead on customer protection, not just follow enforcement.”

Spades API flags risks that traditional systems weren’t built to catch. In this new era of intelligent fraud, early detection is no longer a competitive advantage — it’s the baseline. Institutions that build with this level of context and enriched data are better positioned to stop predatory operators before they reach their customers.

Because by the time regulators show up, the damage is already done.

About Spade

Spade’s API maps messy transaction strings to real merchants, returning clean, high-fidelity data. We match raw inputs to verified businesses and counterparty IDs in our proprietary database – enabling teams to work with reliable names, categories, and geolocation fields. Customers like Stripe, FIS, Bilt, Corpay, Mercury, and Unit use Spade to support real-time authorization, personalize experiences, attribute rewards accurately, and streamline downstream analytics.