Interesting article about credit cards and escorts from Forbes

[dick_nyc]

OutFront

Wages of Sin

Seth Lubove, 11.10.03

 

 

How escort services--often prostitution rings--depend on the kindness of some big credit card companies.

Arthur Vanmoor is no one's idea of a model citizen. He's currently residing in the Broward County, Fla. jail on charges (which he denies) of pimping, money laundering and immigration violations. The inventive Dutch native, who owns patents on a male chastity belt contraption, a cure for hangovers, a caulking gun and a sulfur-based treatment for male impotence, once ran what he boasted was the nation's largest female escort service, with $5 million in annual sales.

 

But none of those facts stopped Cardservice International from soliciting his soliciting business in 1996. Cardservice, which lines up banks to process credit cards for small companies, eventually ran as much as $50,000 a week for Vanmoor's $200-an-hour escort service, at rates as high as triple those for lower-risk businesses. Until two years ago, that is, when Cardservice abruptly canceled Vanmoor's business, citing too many complaints of unauthorized charges.

 

Vanmoor sued, claiming Cardservice, MasterCard International and the bank that processed his credit cards, Humboldt Bancorp of Roseville, Calif., illegally withheld $150,000 of his money. Despite having to testify on tape because he's in jail, and allegations that he was really running a prostitution ring, Vanmoor convinced a Los Angeles jury in August to award him his money, plus another $3 million in punitive damages. Humboldt plans to challenge the verdict.

 

The case did not bathe the credit card industry in good publicity. At the trial Cardservice admitted it was processing credit cards for 143 escort services. For Cardservice's parent company, $7.6 billion (2002 sales) First Data Corp., the revelations are doubly embarrassing. The company's First Financial Bank unit is already known as one of the nation's largest credit card processors for Internet porn, handling payments for big aggregators of porn-site payments such as InterCept's Internet Billing Co. unit and Paycom. The company refuses to comment on Vanmoor beyond a statement that it "processes for a variety of businesses" and ensures "our clients transact payments legitimately."

 

First Data isn't alone when it comes to finding itself in bed with escort services. Ebay's PayPal payment exchange service is also a favorite among Internet escort sites, despite the fact that PayPal prohibits its use for "adult" or "sexually oriented" goods. Jessica, of Southern Belle Escorts, a busty redhead who poses nude on her Web site advertising a $285 "one on one," will be happy to take your payment through PayPal.

 

 

 

 

 

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[+ Charlie]

I hope Hooboy saw that last paragraph.

[dick_nyc]

That was one of the reasons for posting it. Also the heads up to the escorts who do take credit cards. I probably would not pay with a credit card but I have friends who pay for everything with a credit card even when they shouldn't. It is just too easy to give away control of your life even more to others and you don't really know what happens after. We need to be more watchful of what is going on around us in matters like this.

[TedLinden]

I actually got some spam from someone wanting to set up special credit card accounts for escorts.

 

Just prior to hitting delete, I wondered breifly if I lose business because I don't take plastic.

[dick_nyc]

From the article it sounds like you are better off not taking plastic. You may end up whistling for you money and you are not a big enough business to win against the credit card companies. I wonder what happens if the PayPal people or other credit card handlers decide to slough you off between the time you take the charge and the time they pay you. Bet you never see a dime of the money in that case. Or am I just getting cynical in my old age from living here in NYC.