Security & Fraud

Illegal Online Drug Sales Threaten Acquiring Banks

The computer can bring anything to you: entertainment, deep knowledge, new language … why not drugs? As is the case with anything that involves a transaction, the rules of supply and demand still hold sway, and as G2 Web Services recently noted, “violating websites” allow for trafficking in just about anything.

But trafficking in anything — when the “anything” is illegal — is against regulations, especially regulations that extend across borders, and card scheme rules.

In one recent finding by G2, monitoring across accounts, websites and financial stakeholders requires constant vigilance (which has costs, both quantifiable in terms of expenses and manpower hours) — learning, cataloging and tracing the new supplements and drug names that seem to have endless iterations.

For risk professionals, the firm noted, the situation is complicated by the fact that the sheer number and iterations of illegal products and drugs continues to grow and become more interconnected. A report by the FDA estimated that as many as one in four Americans buy prescription drugs using an online conduit. Those prescription drugs are often from fake pharmacies — not just in the United States but also global outposts, where the oldest firms are based in the Middle East and Asia. Vigilant security measures make it so that ease of transactions are compromised and profits fall across all parties involved that may be termed “good actors” — extending, of course, to acquiring banks.

As noted by Dan Frechtling, chief product officer at G2 Web Services: “Illegal drugs, while difficult to track, are always illegal. Pharmaceuticals are a bit harder because there are legitimate online pharmacies, selling viable pharmaceuticals to legitimate customers with prescriptions. We work hard to know the difference and to help our clients stay current on all illegal drugs and pharmaceutical regulations, as well as the transaction methods these violators are using.”


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