troubling trends from a bram perspective - mastercard · 2016-11-11 · troubling trends from a...

Troubling Trends from a BRAM Perspective

Jeffrey D. De Petro, Business Leader, Franchise Integrity, Customer Performance Integrity

Tal Bitton, Program Manager, Franchise Integrity, Customer Performance Integrity

©2015 MasterCard. Proprietary and Confidential.

The BRAM Program is an initiative launched in 2005 which is designed to protect MasterCard and its customers from illegal and brand-damaging transactions, which may pose significant fraud, regulatory, or legal risk, or may cause reputational damage.

Business Risk Assessment and Mitigation (BRAM) Program


*Examples of BRAM Violating Transactions

• Illegal sale of prescription drugs and/or tobacco products

• Illegal Internet gambling / miscoded gambling

• Child exploitation

• Offensive adult pornography

• Sale of counterfeit merchandise

• Sale of goods or services in violation ofintellectual property rights

• Sale of certain types of drugs or chemicals (synthetic drugs, salvia divinorum, etc.)

*Examples are not exclusive. Any product or service that is illegal or brand-damaging is included in BRAM.

BRAM Program Violations


Partnerships


•Law Enforcement•Rights Holders•Web Crawler•Internal Investigation

Referrals

•Conduct Investigation•Perform Trace•Confirm Non-Compliance•Notify Acquirer

MasterCard Process

•Conduct Investigation•Cease Activity•Provide Response•MATCH Listing

Acquirer Process

BRAM Investigative Process


• Shell Corporation• Historically implemented to avoid paying taxes and to give presence in a country/region• Used by some merchants to establish a merchant account with an acquirer in a

country/region• Can be leveraged to circumvent “Area of Use” rules• May be used for deceptive practices, increases risk and creates consumer confusion• Potentially impacts interchange and foreign transaction fees

• Load Balancing• A practice by which merchants establish multiple merchant accounts in order to circumvent

detection• May be used for deceptive practices, introduces increased risk into the payments ecosystem,

may result in excessive fraud and chargebacks• Contract with numerous acquirers to set up multiple merchant accounts• Cascade transactions via numerous merchant accounts until a successful authorization is

obtained• BIN-Cascade higher risk transactions to a less favorable acquiring BIN knowing that the

merchant accounts are disposable

Ongoing Concerns


Dear valued customer, when you receive your statement, you may be charged by any one of these descriptors below. The descriptor could change from month to month, but the price should not be altered………….

Load Balancing


• Violations of intellectual property rights (trademark and copyright infringements) continue to increase

• MasterCard has a clear IP Piracy Policy where we investigate all complaints of suspected IP infringement

• Dedicated email address of [email protected] and form for reporting of any suspected IP infringement

• Work with a variety of law enforcement agencies worldwide, IP rights owners and associations that represent IP rights owners – IP infringement covers pirated movies, TV shows, music and software

– IP infringement also covers counterfeiting of brands such as luxury fashion brands ranging from Louis Vuitton to Ugg’s to Ray Ban’s

IP Piracy Policy (Intellectual Property Rights - trademark and copyright infringements)


• Synthetic drugs are products with psychoactive and/or stimulant characteristics

• Create health and safety concerns• Change molecular structure to continuously

evade regulation and law enforcement • Increasing number being created and sold• Marketed as incense/potpourri/bath salts • Marketing is targeted to youths• They may or may not be illegal in some

jurisdictions and may be subject of further regulation

• Use of mobile applications for in-app purchases

Synthetic Drugs


Synthetic Drugs – Product Examples


Synthetic Drugs – Site Examples

• Violating site – sodoozyaroma.com• Approved site – sodoozy.com (just a front for violating site)• Similar traits – similar web layout, similar scrolling ads layout, etc.


• Counterfeit Medical and Dental Devices• Devices are either counterfeit, not approved for sale, expired, etc.• Items include contact lenses, diagnostic testing kits for HIV,

diabetes, pregnancy, etc., intravascular catheters, and instruments and machines for hospitals, doctors and dentists, to name a few

• Gambling Regulations• Norwegian Gaming Authority• German Gambling Authority

• FOREX Merchants• Japanese Financial Services Agency

• Mobile Repeaters• Devices to extend mobile reception• Licensed in UK

New BRAM Items Added


• Electronic Cigarettes and Devices• On 5 May 2016, the U.S. FDA finalized a rule extending its authorities to all

tobacco products including, but not limited to, the regulation of electronic nicotine delivery systems (such as e-cigarettes and vape pens), cigars, hookah (waterpipe) tobacco, pipe tobacco, and nicotine gels

• The rule also includes age limits and warning label requirements• The final rule will become effective on 8 August 2016 and MasterCard

plans to release a Bulletin on 15 July 2016

• Claims of Coercion• MasterCard will consider a claim of coercion valid if the cardholder (or the

cardholder’s immediate family member) is coerced to complete a transaction because of threat of physical harm or the unlawful taking of property if the cardholder refuses to complete the transaction

• Global Security Bulletin No. 5, 16 May 2016

New BRAM Items Added – Cont’d


• e-Voucher Merchant Models• May be used to circumvent MasterCard Rules for illegal activity such as

gambling• Model is considered a Digital Wallet Operator (DWO) and must be

compliant with those rules• Funding from a wallet to a prepaid card to circumvent rules

• Proxy Avoidance / Anonymizer Sites• Service allows masking of the geographic location of the customer• Service may be used to circumvent Rules• May allow access to a site that has IP blocks such as streaming services and

gambling sites that block by IP per regulatory jurisdiction

Products/Services to Watch


• Fantasy Sports Sites• Laws in the USA are changing• Encourage acquirers to follow the changing laws to ensure

compliance

• Mobile Applications• More and more prevalent and relevant• Need to ensure these are monitored just like the merchant’s web

and mobile presence to ensure compliance• May be used to circumvent rules

• Peptide Sites• May sell pharmaceuticals without a prescription (cancer drugs,

steroids, etc.)• Sites say they sell to research labs and universities• State not for human consumption

Products/Services to Watch Cont’d


E-Learning Platform for MasterCard's Rules, Compliance

Programs and Dispute Resolution Process

Customer Compliance Programs:• Business Risk Assessment and Mitigation (BRAM)• Excessive Chargeback Program (ECP)• Global Merchant Audit Program (GMAP)• Member Alert to Control High-Risk Merchants (MATCH)• System to Avoid Fraud Effectively (SAFE) Compliance• Issuer Monitoring Program (IMP)• Data Integrity• Dispute Resolution Management (DRM)• Dynamic Currency Conversion (DCC)

www.mastercard.com/elearningAccess is Complimentary

Learn How MasterCard Enables Commerce and Helps Protect the Interests of All Participants in the Payment System

Jeffrey D. De PetroBusiness Leader, Franchise Integrity, Customer Performance Integrity

[email protected] 914-249-2907

Questions?

troubling trends from a bram perspective - mastercard · 2016-11-11 · troubling trends from a...

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