{"id":4531,"date":"2019-03-27T18:49:20","date_gmt":"2019-03-27T18:49:20","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=4531"},"modified":"2022-05-05T10:57:05","modified_gmt":"2022-05-05T16:57:05","slug":"high-risk-trends-series-problematic-products","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/expert-perspectives\/underwriting-risk\/high-risk-trends-series-problematic-products\/","title":{"rendered":"High-risk Trends Series: Problematic Products"},"content":{"rendered":"\n

Dealing with high-risk portfolios adds complexity\nto a PF’s compliance efforts, presenting potential headaches as they look to\nkeep up with a rapidly changing landscape under heightened regulatory and card brand\nscrutiny. T<\/em>his week, we begin an\noccasional series on the trends that are facing payment facilitators operating\nin the high-risk space. <\/em><\/p>\n\n\n\n

David Khalaf, LegitScript<\/em><\/p>\n\n\n\n

A\nmajor challenge for payment facilitators entering the lucrative supplement and\npharmaceuticals spaces is navigating the dizzying number of products. There are\nhundreds of thousands of supplements, pharmaceuticals, and other products\nregulated by the Food and Drug Administration, with many more added every week.\nHow can payment facilitators mitigate risk while onboarding and monitoring these\nmerchants?<\/p>\n\n\n\n

One\nkey approach is to keep abreast of trends about the types of problematic\nproducts that are gaining in popularity or that exist in regulatory gray areas.\nKnowing what types of products are most likely to cause problems or draw\nregulatory scrutiny can help you watch for them and act before they lead to fines\nrelated to Visa’s Global Brand Protection Program (GBPP) and Mastercard’s\nBusiness Risk Assessment and Mitigation (BRAM) compliance programs. <\/p>\n\n\n\n

Below\nare the top five trending high-risk products you should know about.<\/p>\n\n\n\n

Cannabidiol<\/strong>\n(CBD)<\/strong><\/p>\n\n\n\n

Few products in recent years have promised as much opportunity\nfor payment facilitators as CBD. With the passage of the 2018 Farm Bill, hemp\nand CBD have been removed from the DEA\u2019s Controlled Substances schedules\nentirely, opening what is expected to be a multibillion-dollar market. <\/p>\n\n\n\n

However, CBD sales are\nnot a free-for-all. For now, at least, CBD may not be marketed as a\nfood or dietary supplement, and merchants may not make claims that CBD can\ntreat, prevent, or cure diseases. Although laws have changed at the federal\nlevel, many US states still consider CBD a controlled substance. Furthermore,\ngray-market products like CBD are at a higher risk for transaction laundering. <\/p>\n\n\n\n

The bottom\nline for now is that merchants selling CBD still present considerable\nuncertainty. Payment facilitators looking to enter into this space should be\ndiligent about tracking rules and regulatory changes.<\/p>\n\n\n\n

DNP<\/strong><\/p>\n\n\n\n

The\nindustrial chemical 2,4-dinitrophenol (DNP)\nis a fertilizer and pesticide that is abused by people for weight-loss\npurposes. Despite clear evidence of its dangers, there has been a rise in\nonline sales of DNP as a \u201cdietary supplement,\u201d and many recent deaths<\/a> attributed to its use. <\/p>\n\n\n\n

Because\nDNP is among the most dangerous products being sold for weight-loss purposes\ntoday, merchants selling the chemical for human consumption frequently\nobfuscate their true intentions by creating websites that appear to be selling agricultural chemicals. By seeming to\nsell DNP for legitimate purposes, they are able to keep a merchant account. <\/p>\n\n\n\n

However,\nfertilizer merchants selling DNP packaged as tablets or capsules should be a\nred flag. Ultimately, any merchants selling DNP \u2014 even ones that appear\nlegitimate \u2014 should face careful scrutiny. <\/p>\n\n\n\n

Selective Androgen Receptor\nModulator <\/strong>(SARMs)<\/strong><\/p>\n\n\n\n

These\nchemicals, which are legal for use in research, are designed to replicate the\neffects of testosterone. Though SARMs were originally developed as\ninvestigational drugs by pharmaceutical companies, they have quickly become\npopular as performance-enhancing products\namong bodybuilders and other athletes due to the perception that there is a\nlower risk of side effects than anabolic steroids. <\/p>\n\n\n\n

There\nhas been an increase in dietary supplements containing SARMs such as Ostarine, Andarine,\nand Testolone. These substances have been subject to heightened scrutiny from\ngovernment agencies, citing health risks such as liver toxicity and increased\nrisk of heart attack and stroke. Both the FDA and Health Canada consider SARMs\nto be unapproved drugs that have not been reviewed for safety and\neffectiveness. <\/p>\n\n\n\n

What\nis the best way to spot SARMs? Payment facilitators should watch out\nfor websites selling \u201cresearch chemicals,\u201d and should check the ingredients of\nall products that supplement merchants market for use in bodybuilding. <\/p>\n\n\n\n

Synthol<\/strong><\/p>\n\n\n\n

SARMs\naren\u2019t the only trend in dangerous and illicit products used for bodybuilding\nand body shaping. Synthol, which has been around for years but has surged in\npopularity recently, is an injectable used by bodybuilders to boost the\ncosmetic appearance of muscles. <\/p>\n\n\n\n

When\ninjected, the oil expands and hardens inside the body, resulting in a rocklike\ntexture and appearance. Because it is typically marketed online as \u201cposing oil\u201d\nto be used topically, synthol frequently passes under the radar of payment\nfacilitators and e-commerce platforms. <\/p>\n\n\n\n

The\nFDA has not approved synthol or any dermal fillers for large-scale body\ncontouring or for implantation into tendons, ligaments, or muscles. This lack\nof regulation poses major risks for those who inject it, but it still remains popular with bodybuilders<\/a> looking for quick, dramatic changes in\nappearance. <\/p>\n\n\n\n

Apetamin<\/strong><\/p>\n\n\n\n

Most merchants selling synthol should raise a red flag, especially if they sell the product exclusively. Product descriptions of \u201cpainless technology\u201d or \u201cpharmaceutical-grade ingredients\u201d may warrant closer scrutiny. If merchants offer \u201cdiscreet shipping,\u201d that also is a cause for concern.<\/p>\n\n\n\n

Apetamin is an unapproved drug marketed as a vitamin supplement for targeted weight gain \u2014 sometimes called getting \u201cslim thick.\u201d It contains cyproheptadine, an active pharmaceutical ingredient available only in prescription drugs in the US. <\/p>\n\n\n\n

Cyproheptadine\nis an antihistamine used to relieve allergy symptoms such as watery eyes, runny\nnose, sneezing, hives, and itching. A side effect of the drug is increased appetite and, as a result,\nit has been used in the treatment of anorexia and severe malnutrition. This side\neffect has also sparked a trend for otherwise healthy people, mostly women, to\nmisuse Apetamin for cosmetic purposes \u2014 for targeted weight gain. <\/p>\n\n\n\n

Apetamin,\nwhich is sold as a syrup and as tablets in bright orange packaging, is often featured on social media and\nblogs as a wellness product, frequently positioned alongside cosmetic tutorials\nand fitness tips. For this reason, consumers can easily confuse it for a\ndietary supplement.<\/p>\n\n\n\n

Check\nback with PaymentFacilitator.com for more in our series on high-risk trends,\nincluding merchants engaged in fraud and scams, and merchants posing reputational\nrisk. <\/p>\n","protected":false},"excerpt":{"rendered":"

Dealing with high-risk portfolios adds complexity to a PF’s compliance efforts. This week, we begin an occasional series on the trends that are facing payment facilitators operating in the high-risk space. <\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[1022],"tags":[290,323,479,502,764,765,876,877],"class_list":["post-4531","post","type-post","status-publish","format-standard","hentry","category-underwriting-risk","tag-fda","tag-fraud-protection","tag-legitscript","tag-mastercard","tag-risk-management","tag-riskcompliance","tag-the-payment-facilitator-landscape","tag-the-payment-facilitator-model"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=4531"}],"version-history":[{"count":4,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4531\/revisions"}],"predecessor-version":[{"id":8694,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/4531\/revisions\/8694"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=4531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=4531"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=4531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}