Blog

February 03, 2022

The Risks Behind Cyberlockers

By Robert Ellenhorn, Payment Risk Specialist

EverC-Blog-CyberLockers-1

What is a Cyberlocker?  

Cyberlockers are online storage services which are used primarily to host and allow access to IP rights infringing material (movies, television shows, music) while affording both the uploader and the cyberlocker itself degrees of anonymity and deniability that illegal activity is taking place. However, in addition to IP Rights Infringing content, cyberlockers are a hotbed for the dissemination of child exploitative material, non-consensual pornography, and other harmful content.  

Cyberlockers versus Legitimate Cloud Storage 

While both services allow users to upload documents to the cloud and to be shared by others, there are several elements which differentiate legitimate cloud storage services from their cyberlocker counterparts.  The most basic differences are the business models, the basic use case for the services, and the content hosted on them.  

Whereas legitimate cloud services are primarily intended for the sharing of business, personal and other documents with a small group of trusted people, cyberlockers are intended for mass dissemination of content. While legitimate cloud storage services store files for as long as the user pays a subscription fee, cyberlockers often delete content which does not generate traffic. 

The starkest difference between legitimate cloud storage services and cyberlockers is the types of content which they host and their attitude towards removing and preventing the dissemination of illicit material.  Cyberlockers are notoriously lax about enforcing take-down requests.  


Cyberlocker Risks
 

Processing payments for cyberlockers entails several criticals risks for banks, payment processors, and other related parties. The FBI has arrested and stifled the activity of various cyberlocker operators.  Some cyberlockers have been listed on the US Trade Representative Office’s 2020 Review of Notorious Markets for Counterfeiting and Piracy. Furthermore, card brand compliance programs often issue fines to acquirers regarding cyberlocker activity. In the case of VISA, cyberlockers have a dedicated MCC and must be classified as “High-Brand Risk Merchants.” 

Be Proactive About Cyberlockers  

To help our customers stay ahead of risk associated with cyberlockers, we've built our technology to assist in the detection of merchants involved in cyberlocker related activity and therefore reducing portfolio risk and exposure to card brand notifications.

Talk to us today and take a proactive approach to monitoring the cyberlocker landscape and guard against brand damage risk. As a leading technology company in fintech, we are committed to interrupting payment activity related to some of the most heinous sorts of criminal activity – including child exploitation. 

For more information regarding cyberlockers or how EverC can reduce risk in your merchant portfolio, contact us at info@everc.com or myself directly at roberte@everc.com.