By: Greg Baxley, Marketing Coordinator
The rapid growth of Internet commerce has led to an explosion of unlicensed online drug retailers, sometimes referred to as rogue pharmacies, peddling everything from male enhancement pills to cancer medications. In search of cheaper prescription drugs, Americans are increasingly turning to these internet pharmacies, which often sell misbranded, adulterated and counterfeit drugs. These transactions not only put consumers at risk, but often fraudulently utilize valid merchant accounts with tactics of transaction laundering. Further skirting government regulations, AML laws and card scheme restrictions.
“The vast majority of websites selling prescription drugs are not legitimate,” says Carmen Catizone, D.Ph., executive director of the National Association of Boards of Pharmacy (NABP). Last June, for example, the Food and Drug Administration (FDA) took action against more than 1,050 sites, seizing products being sold fraudulently as FDA-approved prescription drugs and medical devices. Catizone points out that of the almost 11,000 online drug outlets that NABP recently reviewed, only about four percent were operating according to U.S. laws and standards.
The Food and Drug Administration estimated in 2013 that one in four Americans buys prescription drugs online, often from what are fake pharmacies.
With the development and implementation of the Merchant Monitoring Program (MMP) last July, acquirers, PSPs and ISOs face increasing responsibility for maintaining violation-free portfolios.
It has become essential to place emphasis on due diligence by monitoring merchants using vendor services including Persistent Merchant Monitoring from G2 Web Services. The rise of transaction laundering has also made Transaction Laundering Detection an important preventative resource.
To learn more about the impact of illegal drugs and pharmaceuticals on the global payments industry and steps for protecting your organization against fraud, view our recent webinar Illegal Drugs and Pharma: The Kingpins of New Risk on-demand. Presenters Dan Frechtling, chief product officer at G2 Web Services, and Dione Hodges, senior risk management director at Sterling Payment Technologies walk through case studies, examples of recent trends, and tips for keeping violations out of your portfolio.