It’s a well-known practice for body builders and athletes to illegally use performance-enhancing substances during training. Indeed, it wasn’t so long ago that Lance Armstrong’s cycling legacy crumbled in what the US Anti-Doping Agency (USADA) called “the most sophisticated, professionalized and successful doping program that sport has ever seen”.
While the use of steroids in and of itself is not illegal, the synthetic substance can cause serious side effects or further health risks if taken without a medical prescription. This is mostly concerning anabolic steroids, which are commonly used to “bulk up” rather than build muscles through a strict regimen of weightlifting and diet. Doctors will typically never prescribe anabolic steroids to young, healthy people to help them build muscles.
In the same vein, selective androgen receptor modulators (SARMs) are a class of therapeutic compounds that have similar properties to anabolic steroids, but with less side effects. What makes them different from anabolic steroids is that they selectively bind to certain tissues rather than all over the body.
SARMs are marketed as diet supplements or as research chemicals, often with disclaimers stating that they are not for human consumption. As it stands, there are no Food and Drug Administration (FDA) approved SARMs available, and it’s illegal for doctors to prescribe them in the US. This classification, however, varies based on jurisdiction as SARMs are legal prescription medicines in Australia.
So, what's the risk?
There are many risks to financial institutions and payment providers associated with merchants who illegally import and sell anabolic steroids and SARMs, including the following:
- Merchants selling illegal SARMs or steroids without prescriptions transgress a multitude of laws and regulations in many jurisdictions, exposing payment facilitators to civil litigation or criminal prosecution.
- Due to the health risks associated with steroid use and consumption of SARMs, the legal repercussions and possible controversies surrounding these illicit sales constitute a reputational risk.
- Online merchants dealing in the sales of anabolic steroids and SARMs are likely engaged in transaction laundering to earn revenues.
Card brands specifically prohibit any type of unlawful activity from entering their payments systems.
Even if they aren’t aware of it, financial institutions or payment providers facilitating the unlawful sale of prescription medicines or SARMs risk hefty fines, reputational harm, or disqualification from card brand access.
How payment providers can ensure their payment infrastructure is not being abused for the illicit sale of steroids and SARMs:
- Audit their portfolio for known sellers of pharmaceuticals and nutraceuticals, ensuring that all product offerings comply with regulations per jurisdiction.
- Partner with a Merchant Monitoring Service Provider to track new listings and merchant product changes.
- Use tools and procedures to identify suspicious merchants who may be engaged in transaction laundering.
Growing your portfolio while managing risk
Payment providers must walk a fine line between having robust risk controls and operating quickly to drive business. If too heavy of a compliance control set is implemented, large amounts of false-positive notifications may occur, and this can slow down business growth or cause loss in revenue.
AI-driven technology is an essential tool in detecting illicit merchant activities, helping institutions operating in the payments ecosystem to reduce their overall portfolio risk and possible repercussions from major card brands.
At EverC, we continually invest time and data science resources to ensure that the ecosystem supporting our platform never gets stale. Our solutions provide actionable insights to help payment providers and marketplaces avoid illicit commerce such as the sale of steroids or SARMs.