By: Greg Baxley, Marketing Coordinator
Criminals profiting from the online sale of unapproved prescriptions are targeted
The Internet is a little safer today than it was last week, thanks to Operation Pangea an international law enforcement effort in cooperation with more than 190 police officers, customs and health regulatory authorities from 103 different countries and payments industry partners including G2 Web Services. Operation Pangea IX resulted in 393 arrests worldwide, the seizure of more than $53M worth of potentially dangerous medicines and the suspension of 4,932 websites selling illicit pharmaceuticals. G2 has participated and supported this coordinated effort since 2012.
Announced in a press release published June, 9, 2016, the effort was part of the Ninth Annual International Internet Week of Action (IIWA), a global cooperative operation to combat the unlawful sale and distribution of illegal and potentially counterfeit medical products on the internet. This category is one of the largest headaches for compliance executives in the merchant acquiring space, threatening both consumers and businesses alike. In addition to health risks, illegal online pharmacies pose other threats as well, including credit card fraud, identity theft and the spread of computer viruses.
E-Commerce is a breeding ground for counterfeit medications and medical devices
Among the 12.2 million fake and illicit medicines seized during the operation were fake cancer and anti-malarial medications, substandard HIV and diabetes testing kits, and dangerous steroids. Also recovered were more than 270,000 unapproved dental and surgical devices worth an estimated $1.1M.
Up to 1% of medicines available in the developed world are likely to be counterfeit, according to the World Health Organization (WHO). On a global scale, this figure rises to 10%. Counterfeit goods can form up to 30% of the market in certain areas of Asia, Africa and Latin America. This is an issue that reaches across borders without discrimination.
“Preventing illegal internet sales of dangerous unapproved drugs is critical to protecting consumers’ health. Operation Pangea IX demonstrates the FDA’s continuing commitment to stand united with our international partners to protect consumers in the United States and throughout the world from criminals who put profit above the health and safety of consumers.”
– George Karavetsos, Director of FDA Office of Criminal Investigations
Acquiring banks are at risk of regulatory scrutiny and penalties
Substandard, spurious, falsely labelled, falsified and counterfeit medical products are by their very nature difficult to detect. They are often designed to appear identical to the genuine product and may not cause an obvious adverse reaction, however they often will fail to properly treat the disease or condition for which they were intended. In many cases death is the outcome. In 2013, INTERPOL determined that more than one million people die each year from counterfeit drugs, highlighting one of the fastest-growing and most lucrative income sources for global organized crime networks. Operation Pangea IX launched 700 investigations by national authorities worldwide with at least 40 cases directly linked to organized crime.
“Whilst the seizures on the ground prevent these potentially lethal drugs and products from reaching unsuspecting consumers, equally as important is shutting down the websites through which these criminals operate. Raising public awareness about the dangers of buying medicines online is essential if we are to choke off this source of funding for organized crime which is making significant profits at the cost of people’s health and safety.”
– Tim Morris, INTERPOL Executive Director of Police Services
Counterfeit medical and dental devices are clear restrictions outlined in monitoring program requirements from card schemes. But beyond the scope of brand damaging activities and the breach of merchant agreements, the sale and use of these items can cause catastrophic harm to consumers. This is of major concern for acquirers whose portfolios could contain merchants peddling these goods.
Without proper merchant monitoring solutions, acquiring banks are exposing themselves to regulatory scrutiny and penalties, card scheme fines, and the loss of sponsor banks for downstream partners. Due diligence has never been more paramount.