When it comes to the very profitable supplement and nutraceutical market, payment facilitators need to pay attention and keep up.
Though new products enter the market every day, payment facilitators must keep an eye on trends so they can mitigate risks while continuing to approve and monitor merchants.
The best approach is to maintain a list risky products that have become popular, as well as any items that fall into legal gray areas. Staying abreast of any problematic products can prevent you from getting into regulatory hot water with the major credit card schemes.
To date, these are the top products to watch out for:
CBD (Cannabidiol)
Though passage of the 2018 Farm Bill into law legalized hemp and removed it from the Drug Enforcement Agency’s list of controlled dangerous substances, all CBD sales are not legal.
Currently, CBD may not be promoted as a food or dietary supplement, and it cannot claim to cure or prevent any diseases. Despite laws changing at the federal level, some states have adopted their own laws banning CBD products. Any item that falls in a category with conflicting laws is at a greater risk transaction laundering.
Any payment facilitator that want to work with merchants in this industry must monitor any new rules and regulatory changes to avoid penalties.
DNP
People abuse the industrial chemical 2,4-dinitrophenol (DNP), which is a fertilizer and pesticide, to lose weight. Despite proof of the chemicals dangers, including death, there has been an upswing in sales of it as a dietary supplement.
It is important to note that any merchant selling this chemical in tablets or capsules should be flagged. There is no explanation for selling fertilizer in pill form unless it is for illegal use.
Selective Androgen Receptor Modulator (SARMs)
SARMs, which are designed to replicate the effects of testosterone, are being used as performance-enhancing products by bodybuilders and other athletes. There is a misconception that they have fewer risks than anabolic steroids.
The market has recently been flooded with supplements that contain SARMs, such as Ostarine, Andarine, and Testolone. Evidence shows that these substances can increase the risk of heart attack and stroke.
Payment facilitators should be on the lookout for merchants selling “research chemicals.” Payment facilitators should view the ingredients and see where ads are showing up.
Synthol
Synthol is a mix of lidocaine, oil, and alcohol that has also become popular with bodybuilders. Synthol is a topical treatment that bodybuilders are suppose to use to enhance the look of their muscles.
Instead, they are injecting the dangerous substance. The results are rock-like muscles, which often lead to dangerous conditions later that sometimes require surgery.
The U.S. Food and Drug Administration has not approved synthol as an injectable body-contouring agent for muscles, tendons, and ligaments.
Payment facilitators need to be on the watch for products marketed as posing oil. Also, facilitators should be scrutinize any merchant that promises “discreet shipping” or “pharmaceutical-grade ingredients.”
Apetamin
Apetamin, sometimes called “slim thick,” is an unapproved drug marketed as a vitamin supplement for targeted weight gain. It contains cyproheptadine, which is an antihistamine that is only sold legally in the U.S. as a prescription drug.
The drugs side effect is weight gain, so it is being used to treat eating disorders, like anorexia. It is sold in syrup and tablet forms.
Facilitators should look out for any social media posts or blogs that promote the drug, which is sold in bright orange packaging. It is often featured on sites and with content that promotes fitness tips.
Penalties for Selling These High-Risk Products
Merchants can expect to face regulatory actions and have their high risk merchant accounts shuttered if they are found selling these types of items. Payment service providers and e-commerce platforms may be subject to exorbitant fines for allowing these merchants to falsely promote and sell these products.
In Conclusion
PSPs and e-commerce platforms have a duty to protect their businesses and the public from dangerous products. If you think a merchant is selling any of these items, you need to take action before you get hit with fines and other penalties.
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