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5 Products That Can Indicate Potential Violations

Knowing what your merchants are selling is key to minimizing your risk for potential violations, especially since merchants can add products to their websites at any given moment without your knowledge. New products are constantly put on the market, and unfortunately, illegal and risky products are often hard to detect and monitor. Without being aware of these products, you run the risk of brand damage and potential violations, including regulatory fines and even legal penalties. While the list of goods and services that violate Mastercard’s BRAM program and Visa’s Global Brand Protection program (not to mention the law) is exhaustive, G2 has compiled a list of five lesser-known products that we have identified on merchant websites that you should be on the lookout for.

1. Ticket Resellers: You’ll get more than you bargained for

As harmless as ticket reselling/”scalping” may seem, there are actually strict laws regarding ticket sales. Each state and country has its own laws regarding ticket reselling, and some are so detailed that they have specific rules depending on the event and venue. Fraudulent ticket sales are also a major issue and are most prevalent during popular sporting events like the World Cup and Olympics – both of which are happening soon. Not only will illegal sales or fraudulent tickets affect your brand image, but you may also face legal ramifications. Check out this website to see ticket resale laws by U.S. state.

2. Erotic Hypnosis = Risky business

Another emerging compliance issue that is little-understood is erotic hypnosis – a form of recreational hypnosis used in a sexual context. Card networks classify erotic hypnosis as nonconsensual sex, as the premise of being hypnotized may include an individual engaging in sexual acts while being in a state of mind preventing them from giving legal consent. If any of your merchants are selling erotic hypnosis services, videos and even MP3 files, your organization may be at risk for card network assessments and regulatory fines.

3. Fake Steroids: And you thought the real ones were dangerous

To add even more complexity to the list of products that may put you at risk, some manufacturers, including those of fake steroids, go to great lengths to disguise their products and promote them as being legal. The sale of fake steroids is on the rise and deciphering the difference between nutraceutical and pharmaceutical steroids has become increasingly difficult. For example, used as a fertility drug and with a prescription, HCG is legal; however, homeopathic HCG (marketed as a weight loss aid) is illegal – the FDA and FTC have found homeopathic HCG dangerous and are working to remove it from the market. As an acquirer, it’s important to take a close look at what products your merchants are selling that may fall into this category.

4. DMAA: A not so natural ingredient

While deciphering the difference between pharmaceutical and nutraceutical steroids is often tricky, identifying DMAA (Methylhexanamine) is a bit more straightforward since the FDA has banned any supplement containing the ingredient. The amphetamine derivative is commonly found in dietary supplements and often advertised as a “natural stimulant” to assist in athletic performance and weight loss. The FDA is cracking down on merchants selling any products containing DMAA, and as the acquirer, you should be closely monitoring your merchants for any of these goods. More information can be found on the FDA’s website.

5. Diabetes Nutraceuticals: Dangerous for you and the consumer

Finally, G2 recommends monitoring your merchants’ websites for the sale of diabetes nutraceuticals. A recent spike in the sale of diabetic creams and remedies claiming to treat and “cure” diabetes has led the FDA to crack down on retailers selling these products due to their ineffectiveness and harmful ingredients. Another concern is that instead of an individual seeking treatment for diabetes from his or her doctor, he or she might buy one of these products hoping to be cured. The FDA is working hard to stop the sale of these goods, and acquirers should be well aware of any merchants selling these items, as they can result in high chargeback volumes and possible brand damage. More information on the FDA warnings can be found here.

Need help monitoring your merchants?

New products are constantly showing up on the internet and unfortunately, some of them are illegal and/or against industry regulations. Staying up to date with the latest products that may pose a risk to your merchant portfolio can be a challenge, especially since many regulations draw a fine line between what is compliant vs. noncompliant.  G2 Persistent Merchant Monitoring monitors for even the most complex violations, including the five listed above, and can help you comply with card network rules related to merchant website content. As a participant in the Mastercard BRAM program and a supporting technology provider for the Visa GBPP (Global Brand Protection Program), G2 stays up-to-date on changing industry and card network regulations, and we closely monitor your merchants’ websites, alerting you of any issues you should be aware of.

Contact us to learn more about how G2 can help you more effectively monitor your merchants and improve your merchant risk management process.


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