By: Greg Baxley, Marketing Coordinator
Counterfeit medical and dental devices are clear restrictions outlined in monitoring program requirements from card schemes. These devices can be imitation, expired, not approved for sale, unregulated, non-sterile or banned by the FDA. Beyond the scope of brand damaging activities and the breach of merchant agreements, the sale and use of these items can cause permanent bodily harm to uninformed consumers. This becomes not just a concern for customers themselves, but also for acquirers whose portfolios could contain merchants peddling unapproved goods. Without proper merchant monitoring vendor solutions, acquiring banks are exposing themselves to regulatory penalties and card scheme fines (for banks), and the loss of sponsor banks (for downstream partners). It’s important to note that all contact lenses, including decorative contacts and any other special-effects contacts, are classified as medical devices by the FDA and require a valid contact lens prescription from a licensed eye care practitioner. Retailers who sell these lenses but don’t require a prescription are selling them illegally in all cases.
Decorative contact lenses are commonly sold through online merchants without FDA approval, using various brand names and messaging that suggests otherwise. Every year, the approach of Halloween heightens fears that consumers will harm their eyes with these disapproved decorative contacts. The lenses (also known as fashion lenses, colored contacts or novelty contacts) are used by wearers to temporarily change the appearance of their eye, whether it be through color or effect. Unfortunately, although very popular for Halloween costuming purposes, the appeal and use of these products actually lasts year-round. Just as with most fashion accessories, these lenses come in a wide variety of types and sizes. They can alter the diameter, shape and design of the natural eye. In recent years, products of this nature have become readily available through online retailers offering a wider selection than ever before to entice consumers. Many of these designs are particularly trendy among the target market of teens and young adults.
There are common misconceptions that decorative lenses come one-size-fits-all, and do not require the same level of care and consideration as standard contact lenses because they can be purchased on the internet. Horror stories have been well documented by mainstream media, including ABC News, USA Today, Mirror UK, CBS News and the Los Angeles Times. But the headlines have done little to slow product supply and demand. Decorative lenses can be purchased from a variety of online retailers spanning merchant categories including cosmetics, cosmetology, party supply, fashion, cosplay, jewelry, costuming, optical, lifestyle, adult, health and beauty. Making it increasingly hard to define risk at onboarding and identify culprits down the line. Beyond the threat of large fines from card schemes, acquirers and payment service providers face regulatory scrutiny, operating liability and potential litigation from injured consumers. Providers of decorative lenses may also be selling through legitimate merchants, constituting transaction laundering. Making it even more paramount to monitor portfolios for risk and compliance.
G2 Web Services has more than 11 years of experience serving financial institutions, providing expert services including Persistent Merchant Monitoring, Transaction Laundering Detection, Service Provider Sentinel and Global Boarding. These solutions ensure that clients conduct thorough due diligence at boarding, maintain compliance, mitigate risk, proficiently monitor merchants, and keep violators from infiltrating merchant portfolios. Visit our Transaction Laundering Detection page for more information on risk solutions.