Fortifying Your Compliance Capsule Ahead of Inquiries and Regulations
Over the past few months, I’ve received inquiries from merchants with concerns about what new card brand regulations are being developed for user generated content and tube sites. Since December, the card brands have been busy conducting audits of acquirers with adult in their portfolio. Many of our acquirers had senior management and board review of the adult space to determine if it is a market that they want to continue with. The Segpay compliance team bore the brunt of these acquirer audits and spent hours gathering information. Several put new oversite requirements in place that we need to now manage monthly. We thought it would be a good idea to help others get ahead of potential reviews and questions that might be coming their way. This month we share what to prepare for, how protect your company and why having a solid foundation is so important.
The Fact-Finding Missions
When Visa and our acquirers are on fact finding missions, we typically have 24 hours to turn around requests. To make sure you are ready for those inquiries, below are key files or polices we were requested to submit for bank audit and review. It’s a good idea to have these in place so you’re ready. Be prepared answer:
- Know your Business/Know your Customer File: File should include full corporate documents, passport, and utility bills for directors and UBOs, current bank statement, Tax ID/VAT Id information, utility bill or lease agreement for office.
- Affiliate Policy: What KYC do you do on your affiliates, what are your sources of marketing, and what, if any, affiliation with tube sites?
- Model Age Verification: Have your files organized so samples of model verification can be easily pulled. Acquirers are now asking for random samples of model verification. Can you easily provide model age verification?
- User Generated Content Policy: If your site focuses on user generated content, have a detailed policy outlining the content review process you have in place and any technology tools that help you monitor the content.
It’s a relief once you’re finished and I’m happy to say, Segpay and all its merchants satisfied the bank audits, and all our acquirers are committed to stay in the adult market. We hope this is the case for you too.
Mastering the Adult Market
Visa isn’t alone in its hesitations; Mastercard is also conducted calls. We participated in some of them with the hope of helping Mastercard better understand the adult market, how tubes interact with paysites as well as sharing our policies with them. Mastercard also reached out to several other payments’ companies in the adult market for feedback to help develop new guidelines related to user generated content. They made it clear they wanted all businesses operating appropriately and following their current Business Risk Assessment and Mitigation (BRAM) guidelines to continue to prosper and utilize the card networks. We feel its good news they’re asking for feedback and gaining a better understanding before rolling out new tube and user generated guidelines. As you all know, guidelines that are too “grey” are a challenge to manage.
This month, Mastercard presented its regulations, below is how it will impact different areas of the industry:
- Tube sites
- Enter into a written agreement with any individual that is contributing content to the website. This includes the individual’s consent, their identity and age.
- All persons depicted in the content must give consent for the content to be distributed and downloaded.
- Age and identity of all persons depicted is required.
- Only verified users can be permitted to upload content.
- All content must be reviewed prior to publication, or real-time if it’s live streamed, and no content can violate the Card Brand BRAM policies
- Website must have a complaint process for reporting, review, and removal of violating content.
- Have policies in place to make sure that the website cannot be used for human trafficking.
- Provide monthly reports to acquirer of flagged content and what was taken down.
- No search terms or marketing partners give the illusion that the content they are marketing will contain child exploitation materials or depictions of non-consensual activity.
- Fan Sites
- Same as Tubes
- Paysites
- Website must have a complaint process for reporting, review, and removal of such content.
- Take down requests/flagged content will need to be reported monthly to the acquirer.
- Have policies in place to make sure that the website cannot be used for human trafficking.
- No search terms or marketing partners that give the illusion that the content they are marketing will contain child exploitation materials or depictions of non-consensual activity.
- Studios
- Not a requirement, but Studios should keep BRAM policies in mind when shooting content,
- Have model consent forms which verify user’s identity and tools in place to verify users (two forms of ID or tools), ensure model releases address the consent provisions of Mastercard’s update (consent to have the content downloaded may not be a in a standard release)
- Models/Content Makers
- Be prepared to provide identity and proof of identity.
Regulatory Updates Are Nothing New to Us
The thought of new rules is always scary but if you take a moment to think about it, we face new rules and regulations every year. At the time of roll out they seem daunting but somehow, we manage to get through them. Just look back at all the chargeback and fraud threshold updates we have been through for example, Visa and Mastercard trial updates or maintaining compliance with GDPR. FOSTA legislation was also a challenge we had to address as an industry. The good news is that we, as an industry, always rise to the challenge and meet new guidelines and in the end become better for it!
Having your files at your fingertips will protect your future. If you can present them to a bank, you can show you’re a well-organized program. This will go a long way in giving them the comfort in taking your business. Don’t know where to start? We can help you build your compliance capsule so you’re ready at a moment’s notice just reach out at [email protected].
