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Backpage alleged to have circumvented credit card refusals

BIScom Subsection: 
Author: 
Editorial Staff

In her special brand of contorted English, California's District Attorney Kamala Harris, says that a website is "an online brothel" and she's determined to jail its operators. Amongst the allegations is money laundering, at least in part based on the fact that the website's owners set up other companies to front their sales so that banks, etc. would allow them to take credit card payments. But Harris is off-target. She should be looking at cloud services providers. Cloudflare is in her back-yard. That would be a good place to start.

US website Backpage.com has been criticised as being an on-line brothel (an impossibility, but accuracy in language is, of course, not a hallmark of US law enforcement). California's Attorney-General, Kamala Harris, is en-route to become a senator and her tendency to speak in nonsense may go down well there.

She says, of Backpage, "By creating an online brothel — a hotbed of illicit and exploitative activity — Carl Ferrer, Michael Lacey, and James Larkin preyed on vulnerable victims, including children, and profited from their exploitation."

There are many offences under the California Penal Code that surround prostitution. As a result, many banks etc. refuse to provide merchant services to businesses that act as, for example, brokers for prostitution.

Backpage is without doubt a hotbed of sales of sexual activity. So, incidentally, is Craig's List.

But Harris and others have got their knickers in a twist over Backpage and Harris brought proceedings agianst its owners charging them with more than a dozen charges of pimping and conspiracy to commit pimping and more than two dozen charges of money laundering. The court threw out all the charges on 9th December but Harris has now come back for another bite at the cherry.

In the earlier case, Harris described the website as "the world's top online brothel" without regard to the accuracy of the statement in law and without producing any evidence to support that it is the world's top anything.

BackPage's dating section carries a full page disclaimer and required visitors to click through an agreement that includes that a wide range of restrictions do not apply to them.

Backpage.Com's Disclaimer and agreement.

Disclaimer

This section contains sexual content, including pictorial nudity and adult language. It is to be accessed only by persons who are 18 years of age or older (and is not considered to be a minor in his/her state of residence) and who live in a community or local jurisdiction where nude pictures and explicit adult materials are not prohibited by law. By accessing this website, you are representing to us that you meet the above qualifications. A false representation may be a criminal offense.

I confirm and represent that I am 18 years of age or older (and am not considered to be a minor in my state of residence) and that I am not located in a community or local jurisdiction where nude pictures or explicit adult materials are prohibited by any law. I agree to report any illegal services or activities which violate the Terms of Use. I also agree to report suspected exploitation of minors and/or human trafficking to the appropriate authorities.

I have read and agree to this disclaimer as well as the Terms of Use.

A quick look at the ads reveals little or no material difference between Backpage and dozens of other free ad sites across the web. Quite why Harris is so determined to make an example of that website is unclear, unless it's the fact that so many women post very revealing photos of themselves in individual galleries. California Girls use words like "tribute expected" although some are more blatant (one advertises "90 for just today usually 100"). And it has to be said that the description as "dating" is far from the mark with it being clear from sexually explicit adverts exactly what is on offer and, often, for how long.

But to gauge the quality of people advertising, try looking at the "legal" section. It's filled with cut rate bankruptcy and eviction services.

Why is this story relevant to financial services businesses? It's because, if Harris wins, then it puts banks and credit card companies on the hook for additional investigations for whether a business might be found, after the event, to be acting illegally and therefore the bank, etc. might be accused of failing to undertake effective due diligence or, even, laundering the proceeds of that offence.

Banks, etc. have taken steps to try to avoid providing services to illegal gambling operations but in the case of Backpage, etc., there is no evidence of criminal conduct. Harris is trying to make new law. She has the support of a number of District Attorneys across the USA.

But it's a moral not strictly legal campaign: it's like prosecuting AT&T because touts post prostitution cards in phone boxes. It's not nice but it's not illegal for the operator, even if it's illegal for the poster.

Harris could do something useful with her time: within her district Cloudflare provides facilities for financial criminals who use their cloud services to hide their activities. The activities of Cloudflare, which claims it is not its responsibility to check the legality of the businesses to which they provide services, are far riskier because the criminals using Cloudflare use it to disguise their true location and their true purpose. These purposes may be the installation of malware on users' computers, card fraud and identity fraud. That's a much bigger issue than the publication of a few photos of frankly unappealing women who want to sell themselves.

 


 

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