The most defensible decision about adult content is not whether you process it, but how rigorously you verify controls.
When a merchant approaches payment processors offering adult content or services, the challenge is not determining whether the content is morally acceptable. The challenge is verifying that robust, tested controls exist to prevent illegal content, protect minors, document consent, manage chargebacks, and respond to violations. Unlike mainstream merchant categories where you verify business legitimacy and assess fraud risk, adult content merchants require you to test governance systems, validate enforcement evidence, and confirm that policies translate into operational reality.
This guide walks through the complete assessment framework we use at Ballerine to evaluate adult content merchants, distinguishing operators with defensible controls from those presenting only policy documents without enforcement infrastructure.
Understanding the Adult Content Landscape
The Risk Classification Challenge
Adult content processing exists in a category defined more by payment industry policies than criminal law.
In most jurisdictions, adult content itself is legal when properly age-gated and when all participants are consenting adults.
The regulatory concern is not the existence of adult content but the presence of:
- Minor access (anyone under 18)
- Non-consensual content (revenge porn, hidden cameras, coerced participation)
- Illegal content (child sexual abuse material, bestiality, extreme violence)
- Fraudulent billing practices (unauthorized charges, deceptive marketing)
- Excessive chargebacks (often driven by purchase denial)
The industry challenge is that "adult content" encompasses a spectrum from professionally produced studio content with rigorous compliance programs to user-generated platforms with minimal controls. Payment processors must differentiate based on operational governance rather than content category alone.
Why Blanket Prohibition Fails
Some payment processors implement blanket adult content bans.
This approach has several problems:
It pushes legitimate operators to less regulated processors:
Operators with strong controls face the same rejection as operators with no controls, creating incentive to hide industry classification or move to processors with lower standards.
It doesn't eliminate risk exposure:
Adult content merchants will find payment processing somewhere. Blanket bans simply remove your ability to assess and mitigate risk through due diligence.
It conflates legal content with illegal activity:
Adult content created by and featuring consenting adults, properly age-gated, with documented consent, is not illegal. Treating all adult content as equally risky ignores material differences in operator quality.
It creates reputational inconsistency:
Payment processors that ban adult content while processing other high-risk categories (gambling, cryptocurrency, nutraceuticals) face questions about which risks they actually assess vs. which they avoid for reputational reasons alone.
The Defensible Framework Approach
The alternative to blanket prohibition is defensible assessment:
- Clearly define acceptable vs. unacceptable content categories
- Require evidence of operational controls, not just policies
- Test those controls during underwriting
- Monitor for compliance degradation post-onboarding
- Maintain enforcement capability to exit relationships when controls fail
This approach positions adult content underwriting as a specialized competency requiring specific due diligence, not a reputational decision requiring avoidance.
The Regulatory and Compliance Context
Federal Law Framework
Before examining specific merchant controls, understand the legal frameworks that create liability for payment processors:
18 U.S.C. § 2257 and § 2257A: Record-Keeping Requirements
Producers and distributors of sexually explicit content must maintain records proving all performers are 18 or older. This includes:
- Government-issued identification
- Performer legal names and stage names
- Dates of production
- Records available for inspection
Failure to maintain proper records creates criminal liability. Payment processors should verify that merchants comply with 2257 record-keeping.
Source: US Code Title 18 Section 2257
18 U.S.C. § 2252: Sexual Exploitation of Minors
Possessing, distributing, or facilitating distribution of child sexual abuse material (CSAM) carries severe criminal penalties.
Payment processors face liability if they knowingly process payments for CSAM distribution.
Due diligence requirements include content moderation systems capable of detecting and removing illegal content.
18 U.S.C. § 2261A: Cyberstalking and Non-Consensual Pornography
Many states have criminalized "revenge porn" (distributing intimate images without consent).
Federal law addresses cyberstalking that includes non-consensual pornography. Platforms must have systems to respond to consent complaints.
FOSTA-SESTA: Fighting Online Sex Trafficking Act
FOSTA-SESTA removed Section 230 immunity for platforms that facilitate sex trafficking.
While targeting illegal activity, this creates compliance obligations for adult platforms to prevent and respond to trafficking.
Platforms must demonstrate active measures to prevent trafficking, including reporting obligations to the National Center for Missing and Exploited Children (NCMEC).
Source: NCMEC CyberTipline
State Laws
Many states have age verification requirements for adult content, revenge porn statutes, and consumer protection laws addressing adult content billing.
Source: National Conference of State Legislatures - Revenge Porn Laws
Card Network Policies
Visa and Mastercard maintain specific policies for adult content processing:
High-Risk Category Classification:
Adult content is classified as high-risk, triggering enhanced monitoring, reserve requirements, and potential registration obligations.
Illegal Content Prohibition:
Card networks prohibit processing for illegal content, including CSAM and non-consensual content. Merchants must demonstrate content moderation capabilities.
Chargeback Thresholds:
Adult content merchants face stricter chargeback ratio thresholds. Exceeding thresholds can result in fines or termination.
Descriptor Requirements:
Transaction descriptors must clearly indicate adult content to prevent purchase denial chargebacks.
Bank and Processor Reputational Risk
Beyond legal and network requirements, banks and processors assess reputational risk. This assessment should be based on:
- Operator Governance Quality: Does the merchant have proper controls?
- Content Category: What type of adult content (e.g., professionally produced vs. user-generated)?
- Historical Performance: Track record of compliance and chargeback management?
- Public Visibility: How publicly visible is the brand?
Reputational risk assessment should focus on the defensibility of the underwriting decision, not avoidance of the category entirely.
The Complete Assessment Framework
1. Age and Identity Verification
Why it matters: The single most critical control for adult content is preventing minor access. Inadequate age verification creates criminal liability, regulatory violations, and reputational catastrophe. Age verification must be robust, tested, and continuously enforced.
"Checkbox" age gates do not constitute verification.
High-Risk Age Verification Approaches:
Self-Certification Only
- User checks a box stating "I am 18+"
- Date of birth entry with no cross-verification
- No identity verification of any kind
- Age gate can be bypassed through browser settings or private browsing
Why this is critical risk: Self-certification is not verification. Minors can easily circumvent checkbox age gates, creating massive liability exposure.
Easily Circumventable Gates
- Age gate only on homepage (not on content pages)
- Age gate applies only to account creation, not content viewing
- Content accessible through direct links without age verification
- Age verification can be reset by clearing cookies or creating new account
Why this is critical risk: If minors can access content by bypassing the age gate, the age gate is not functioning as a control.
No Ongoing Verification
- Age verification occurs once at account creation but never again
- No re-verification even after suspicious activity
- Users can share accounts (verified adult shares login with minor)
Why this is high risk: One-time verification without ongoing monitoring allows verified accounts to be misused.
Acceptable Age Verification Methods:
Government-Issued ID Verification
- Users must upload driver's license, passport, or other government ID
- Document authenticity verified (not just OCR of data)
- Face matching between ID photo and user selfie
- Third-party verification service integration (Jumio, Onfido, Trulioo, Veriff)
Why this is acceptable: Government ID verification with liveness detection and face matching provides strong assurance of age and identity.
Credit Card Age Verification
- Age verification through credit card billing information
- Cross-check with credit bureau data
- Credit cards typically issued only to adults 18+
Why this is acceptable: Credit card verification provides indirect age verification, though less robust than ID verification. Best used in combination with other methods.
Third-Party Age Verification Services
- Integration with specialized age verification providers
- Services use multiple data sources (credit bureaus, public records, device intelligence)
- Ongoing risk scoring based on behavior
Why this is acceptable: Specialized providers aggregate multiple verification signals, increasing confidence.
Device and Behavioral Signals
- Device fingerprinting to detect known minor devices
- Behavioral analysis to identify suspicious patterns (e.g., account creation from school IP addresses)
- Machine learning models to flag high-risk accounts
Why this is supplementary: Useful as additional signal but not sufficient as sole verification method.
What to Request from Merchant
| Age Verification Policies |
- Complete age verification policy documentation
- Which verification method(s) are used?
- At what points is verification required? (account creation, content access, purchases)
- Can verification be bypassed? How?
|
| Technology Integration |
- Which third-party verification vendor is used?
- Integration documentation showing verification flow
- API documentation or technical specifications
- Verification pass or fail rates
|
| Enforcement Data |
- How many verification attempts have been rejected?
- How many accounts have been suspended for age verification failures?
- Response procedures when verification fails
- Example of a blocked minor account
|
| Testing Evidence |
- Evidence that age verification actually works (penetration test results, audit reports)
- Third-party testing or certification
- Internal testing documentation
|
| Ongoing Monitoring |
- How often is re-verification required?
- Triggers for re-verification (suspicious behavior, account sharing indicators)
- Monitoring for account sharing
|
Investigation and Testing Protocol:
Verification Flow Testing
Before approving merchant, test the age verification system:
- Attempt to access content without verification:
- Navigate to website
- Try to view content without creating account
- Try to access content through direct URLs
- Result: Should be blocked
- Attempt to bypass age gate:
- Create account with false DOB (minor)
- Use VPN or proxy to circumvent geographic restrictions
- Clear cookies and retry
- Use private browsing mode
- Result: Should be blocked or verification should still be required
- Test verification rejection:
- Provide ID showing user under 18 (use test environment if available)
- Result: Verification should fail, access denied
- Test account sharing controls:
- Log in from multiple devices simultaneously
- Share login credentials
- Are there controls to detect and prevent sharing?
Vendor Validation
If the merchant uses a third-party verification vendor:
- Verify vendor legitimacy:
- Is the vendor reputable and established?
- Check vendor reviews and industry presence
- Verify vendor is actually integrated (request API logs)
- Check vendor capabilities:
- Does vendor verify document authenticity or just OCR data?
- Does vendor perform liveness detection?
- Does vendor support face matching?
- What is vendor's false positive/negative rate?
- Verify integration depth:
- Is verification required for all users or only some?
- Can users access content before verification completes?
- Are there fallback paths that skip verification?
Historical Performance Review
Request data on verification performance:
| Verification completion rate |
>85% of legitimate users should complete successfully |
| Verification rejection rate |
2–10% (too low suggests weak controls, too high suggests vendor issues) |
| Minor detection rate |
Should have detected and blocked minor attempts (if any data available) |
| Account suspension for verification failure |
Evidence of enforcement |
Audit and Compliance Documentation
Request any third-party audits or certifications:
- Age Verification Certification (if available in jurisdiction)
- External penetration testing of age verification
- Legal compliance audits
- Internal compliance reports
Merchant Assessment Checklist
- Verification Method Strength:
- Government-issued ID verification using reputable third-party vendor
- Document authenticity verification, not only OCR
- Liveness detection and face matching
- Multiple verification signals including payment, device intelligence, and behavioral data
- Verification Coverage:
- Verification required before any content access
- Verification required at account creation and before content viewing
- No direct link access without verification
- Age gate applies to all content, not only the homepage
- Enforcement Evidence:
- Documented verification rejections proving users are blocked
- Account suspensions due to verification failures
- Testing evidence demonstrating verification effectiveness
- Third-party audit or certification
- Ongoing Controls:
- Re-verification triggers for suspicious behavior or account sharing
- Monitoring for account misuse
- Regular testing of the verification system
- Documentation Transparency:
- Ability to provide complete verification flow documentation
- Demonstrable vendor integration
- Availability of enforcement statistics
- Willingness to allow testing during underwriting
Red flag threshold:
- Checkbox-only age verification = CRITICAL RISK (Auto-decline)
- No third-party verification vendor = HIGH RISK
- Cannot provide evidence of verification rejections = HIGH RISK
- Age gate easily bypassed during testing = CRITICAL RISK (Auto-decline)
- No liveness detection or document authenticity checks = HIGH RISK
2. Content Moderation and Illegal Material Prevention
Why it matters: Payment processors face legal and reputational liability when they facilitate distribution of illegal content, including child sexual abuse material (CSAM), non-consensual content, and other prohibited material. Content moderation systems must proactively detect, remove, and report illegal content.
Policy documents stating "we prohibit illegal content" are meaningless without technological enforcement.
High-Risk Content Moderation Approaches
No Automated Moderation
- Content is uploaded and published immediately with no review
- No automated scanning for illegal material
- Moderation occurs only if users report content
- No technological controls, only reactive takedowns
Why this is critical risk: Illegal content can be distributed at scale before detection. This creates liability and demonstrates negligence.
User Reporting Only
- Moderation relies entirely on user reports
- No proactive scanning or detection
- Response times measured in days or weeks
- No prioritization of severe violations
Why this is critical risk: CSAM and non-consensual content cause harm immediately upon publication. Waiting for user reports means harm has already occurred.
Inadequate CSAM Detection
- No integration with PhotoDNA, CSAM hash databases, or similar technology
- No partnership with NCMEC (National Center for Missing and Exploited Children)
- No CyberTipline reporting process
- No training for moderators on CSAM identification
Why this is critical risk: CSAM detection and reporting are legal obligations. Failure to implement industry-standard detection technology demonstrates willful blindness.
Source: NCMEC CyberTipline
Manual Moderation Without Technological Assist
- Human moderators review all content manually
- No automated pre-screening or flagging
- Moderation queue grows faster than moderators can process
- Backlog of unreviewed content
Why this is high risk: Manual-only moderation does not scale. Illegal content will slip through due to volume.
Acceptable Content Moderation Systems
Automated Pre-Upload Scanning
- Content scanned before publication
- Hash-based matching against known illegal content databases
- PhotoDNA or similar technology for CSAM detection
- AI-powered classification for policy violations
Why this is acceptable: Pre-upload scanning prevents illegal content from ever being published, minimizing harm and liability.
Layered Moderation Approach
- Automated pre-screening: Flags high-risk content before publication
- Human review: Moderators review flagged content
- Post-publication monitoring: Ongoing scanning of published content
- User reporting: Users can report violations as additional layer
Why this is acceptable: Multiple layers provide defense in depth. Automated systems catch obvious violations, humans review nuanced cases, ongoing monitoring catches content that evades initial screening.
CSAM Detection and Reporting
- Integration with PhotoDNA or Google's CSAI Match
- Hash matching against NCMEC and NCII (National Child Identification Initiative) databases
- Mandatory CyberTipline reporting for detected CSAM
- Staff training on CSAM identification and reporting obligations
Why this is required: Industry-standard CSAM detection technology exists and must be implemented. Failure to use available tools creates liability.
Non-Consensual Content Detection
- Systems to detect and respond to revenge porn reports
- Integration with StopNCII hash-sharing consortium
- Escalation procedures for non-consensual content complaints
- Takedown within hours, not days
Why this is acceptable: Non-consensual content causes severe harm to victims. Rapid response systems demonstrate commitment to victim protection.
Prohibited Content Category Enforcement
Clear policies prohibiting:
- Content involving minors in any sexual context
- Non-consensual content
- Bestiality
- Incest depictions
- Extreme violence
- Content depicting illegal activity
Technological enforcement through:
- Keyword filtering
- Visual classification (AI models trained to detect prohibited categories)
- Metadata analysis
What to Request from Merchant
| Content Moderation Policy |
- Complete policy documenting prohibited content categories
- Moderation procedures (pre-upload vs. post-upload)
- Escalation procedures for severe violations
- Takedown timelines
|
| Technology Stack |
- Which automated moderation tools are used?
- PhotoDNA or equivalent CSAM detection
- AI classification models
- Hash-based matching
- Integration documentation
|
| NCMEC Relationship |
- Is the platform a CyberTipline reporter?
- How many reports have been filed?
- Staff training on CSAM reporting obligations
- Legal compliance with reporting requirements
|
| Moderation Team |
- How many moderators (FTE)?
- Moderator to content volume ratio
- Moderator training programs
- Moderation queue statistics (backlog, review times)
|
| Enforcement Statistics |
- Volume of content removed (by category)
- Detection method breakdown (automated vs. user reports)
- Average takedown time
- Account terminations for policy violations
|
| Testing and Audits |
- External audits of moderation systems
- Penetration testing to attempt uploading prohibited content
- Regular testing of detection systems
|
Investigation and Testing Protocol
Moderation System Validation
Request access to moderation documentation and test the system:
- Review moderation workflow:
- How does content move from upload to publication?
- Where do automated checks occur?
- How are violations flagged and reviewed?
- Test detection capabilities (in controlled environment):
- Upload test content flagged by hash databases (using known test hashes)
- Attempt to upload content with prohibited keywords
- Test whether system detects policy violations
- Result: Should be detected and blocked
- Review moderation metrics:
- Content removal volume and trends
- Detection rates (automated vs. manual vs. user reports)
- Takedown speed (time from detection to removal)
NCMEC Integration Verification
Verify CSAM detection and reporting:
- Confirm CyberTipline membership:
- Verify platform is registered reporter
- Request evidence of historical reports (redacted for privacy)
- Review PhotoDNA integration:
- Is PhotoDNA or equivalent actually deployed?
- Request API integration documentation
- Verify images are actually scanned (request logs)
- Staff training verification:
- Do moderators receive CSAM identification training?
- Are they trained on reporting obligations?
- Are there clear escalation procedures?
Non-Consensual Content Response Testing
Test response to non-consensual content reports:
- Submit test report (with merchant cooperation):
- Report specific content as non-consensual
- Document response time
- Document resolution process
- Target: Takedown within 24 hours
- Review historical cases:
- Request anonymized examples of non-consensual content reports
- How were they handled?
- Takedown times?
- Account actions taken?
Moderation Capacity Assessment
Assess whether moderation resources match content volume:
| <10,000 daily uploads |
1 moderator per 2,000 uploads |
<24 hour review time |
| 10,000–100,000 daily uploads |
1 moderator per 3,000 uploads |
<48 hour review time |
| >100,000 daily uploads |
Requires sophisticated automated pre-screening plus human review of flagged content |
<72 hour review time for flagged content |
If backlog exceeds these thresholds, moderation capacity is insufficient.
Merchant Assessment Checklist
- Automated Detection:
- Pre-upload scanning of all content
- PhotoDNA or equivalent CSAM detection integrated
- Hash matching against prohibited content databases
- AI classification for policy violations
- Multiple detection layers including automated, human, and user reports
- CSAM Prevention:
- CyberTipline reporter status verified
- Evidence of historical CSAM reports proving system detection
- Staff trained on CSAM identification and reporting
- Integration with NCMEC and law enforcement
- Non-Consensual Content Response:
- Systems to detect and respond to revenge porn
- Integration with StopNCII or similar services
- Takedown within 24 hours of a valid report
- Account termination for policy violators
- Moderation Capacity:
- Moderator staffing appropriate for content volume
- Moderation backlog within acceptable limits
- Clear escalation procedures
- Regular training for moderation staff
- Enforcement Evidence:
- Availability of content removal statistics
- Demonstrable detection system effectiveness
- Account terminations for violations can be shown
- Third-party audits or certifications available
Red flag threshold:
- No automated CSAM detection = CRITICAL RISK (Auto-decline)
- Not a CyberTipline reporter = CRITICAL RISK (Auto-decline)
- No PhotoDNA or equivalent = CRITICAL RISK
- Relies solely on user reports for moderation = HIGH RISK
- Cannot provide evidence of content removals = HIGH RISK
- Moderation backlog exceeds 7 days = HIGH RISK
- No system for non-consensual content response = HIGH RISK
3. Consent Documentation and Verification
Why it matters: Non-consensual content (revenge porn, hidden camera recordings, coerced participation) creates criminal liability and severe victim harm. Platforms must verify that all content participants consented to recording, distribution, and commercial use.
This is especially critical for user-generated content platforms where participants may not be professional performers.
High-Risk Consent Approaches
No Consent Verification
- Users upload content with no verification that participants consented
- No requirement to prove identity of content participants
- No documentation that participants are aware of commercial use
- Platform assumes all uploaded content is consensual
Why this is critical risk: Without consent verification, platforms inevitably distribute non-consensual content. This creates criminal liability under revenge porn statutes and civil liability to victims.
Self-Certification Only
- Uploader checks box stating "all participants consented"
- No verification of claim
- No identity confirmation of participants
- No way to detect false certification
Why this is critical risk: Self-certification is not verification. Users will falsely certify consent, and platforms have no defense when non-consensual content is discovered.
2257 Records Not Maintained
- No age verification records for content participants
- No identity documentation (government IDs)
- No records custodian designated
- Records not available for inspection
Why this is critical risk: 18 U.S.C. § 2257 requires record-keeping for sexually explicit content producers. Failure to maintain proper records is a federal crime.
Source: US Code Title 18 Section 2257
Professional Content Mixed with User-Generated Without Distinction
- Platform hosts both professional studio content (with proper documentation) and user-generated content (with no documentation)
- No distinction in verification requirements between categories
- Studio content compliance used to claim overall compliance, despite weak user-generated content controls
Why this is high risk: Professional content compliance does not extend to user-generated content. Each content source requires appropriate verification.
Acceptable Consent Verification Systems
Identity Verification of All Content Participants
- All individuals appearing in content must be identity-verified
- Government-issued ID required for all participants
- Face matching between ID photo and content
- Records maintained per 2257 requirements
Why this is acceptable: Identity verification enables enforcement of consent because participants are known individuals who can be contacted for consent confirmation.
Affirmative Consent Documentation
Before content publication, platforms collect:
- Written consent from all participants
- Acknowledgment that content will be publicly distributed
- Acknowledgment of commercial use
- Right to revoke consent (with takedown procedures)
Why this is acceptable: Documented consent provides legal defense and demonstrates platform diligence.
Model Release Documentation (For Professional Content)
Professional content should include:
- Industry-standard model releases
- Age verification documentation (government ID copies)
- Producer identification and contact information
- 2257 custodian of records information
Why this is acceptable: Model releases are industry standard for professional adult content and provide legal documentation of consent.
Verification for Amateur and User-Generated Content
For user-generated content platforms:
- All participants must create accounts and verify identity
- Participants must affirmatively consent to content upload
- Consent must be documented and time-stamped
- Consent revocation procedures must exist
Why this is acceptable: Requiring all participants to create verified accounts and consent to each content upload provides strong evidence of consent.
Consent Challenges and Revocation Procedures
- Clear mechanisms for individuals to report non-consensual content
- Rapid takedown upon receipt of credible consent challenge (within hours, not days)
- Account termination for uploading non-consensual content
- Cooperation with law enforcement on criminal cases
Why this is required: Even with strong verification, some non-consensual content may slip through. Rapid response systems minimize harm.
What to Request from Merchant
| 2257 Compliance |
- Custodian of Records designation
- Record-keeping procedures
- Sample 2257 records (redacted)
- Compliance with federal record-keeping requirements
|
| Consent Verification Process |
- Complete consent verification procedures
- How consent is obtained from participants
- Documentation collected
- Verification that all participants are identified
|
| Professional vs. User-Generated Content |
- Content types that exist on the platform
- Different verification requirements for each content type
- How professional content is differentiated from amateur content
|
| Model Releases |
- Sample model release forms
- Requirements for professional content
- Verification that releases are actually collected
|
| Consent Revocation Procedures |
- How participants can revoke consent
- Takedown procedures and timelines
- Historical data on consent challenges and responses
|
| Non-Consensual Content Response |
- Procedures for reporting non-consensual content
- Response times and takedown processes
- Law enforcement cooperation procedures
|
Investigation and Testing Protocol
2257 Compliance Verification
Verify federal record-keeping compliance:
- Custodian of Records verification:
- Who is designated custodian?
- Is custodian information publicly posted per requirements?
- Are records actually maintained and available for inspection?
- Sample record review:
- Request sample 2257 records (redacted for privacy)
- Verify records include required information (performer legal name, DOB, ID copies)
- Verify records are organized and accessible
- Audit compliance:
- Has platform been audited for 2257 compliance?
- External compliance review?
- Legal counsel opinion on compliance?
Consent Verification Testing
Test the consent verification system:
- Upload test content (with cooperation):
- Attempt to upload content without participant verification
- Result: Should be blocked or flagged for verification
- Review consent documentation:
- Request examples of consent forms (redacted)
- How is consent obtained?
- Is consent explicit and documented?
- Test consent revocation:
- Simulate consent revocation request
- Document response time
- Target: Takedown within 24 hours
Historical Performance Review
Request data on consent challenges:
| Consent challenge volume |
Should have data on challenges received |
| Average takedown time |
<24 hours for valid challenges |
| Account terminations |
Evidence of enforcement against uploaders of non-consensual content |
| Law enforcement cooperation |
Evidence of cooperation with law enforcement on criminal cases |
Professional Content Verification
For platforms hosting professional content:
- Model release verification:
- Are model releases collected for all professional content?
- Request samples (redacted)
- Verify releases include required information
- Producer verification:
- Are content producers verified and documented?
- Can platform contact producers if issues arise?
- Content source documentation:
- Where does professional content come from?
- Licensing agreements with studios?
- Verification that licensed content includes proper documentation?
Merchant Assessment Checklist
- 2257 Compliance:
- Custodian of Records properly designated and posted
- Records maintained per federal requirements
- Ability to provide sample records for verification
- External compliance audit or legal opinion
- Consent Verification:
- Identity verification required for all content participants
- Affirmative consent documented before publication
- Consent forms include distribution and commercial use acknowledgment
- Verification completed before content goes live
- User-Generated Content Controls:
- All participants are required to create verified accounts
- Participants must consent to specific content uploads
- Consent is documented and time-stamped
- Multi-participant content requires consent from all parties
- Consent Revocation:
- Clear procedures for revoking consent
- Takedown within 24 hours of a valid revocation request
- Account termination for non-consensual content uploaders
- Law enforcement cooperation procedures
- Documentation Transparency:
- Ability to provide consent documentation examples
- Demonstrable consent verification process
- Availability of enforcement history
- Willingness to allow testing during underwriting
Red flag threshold:
- No 2257 record-keeping = CRITICAL RISK (Auto-decline for US-based platforms)
- No consent verification for user-generated content = CRITICAL RISK
- Self-certification only for consent = HIGH RISK
- Cannot provide examples of consent documentation = HIGH RISK
- No consent revocation procedures = HIGH RISK
- Takedown time for valid consent challenges >72 hours = HIGH RISK
4. Chargeback Prevention and Transaction Dispute Management
Why it matters: Adult content merchants face higher chargeback rates than most categories, driven by "purchase denial" (customers claiming they didn't make the purchase) and "family fraud" (family members discovering charges). Excessive chargebacks create financial losses, card network fines, and potential processing termination.
Defensible adult content processing requires sophisticated chargeback prevention and dispute response systems.
High-Risk Billing Practices
Unclear Transaction Descriptors
- Generic or misleading descriptors that don't indicate adult content
- Company name doesn't clearly identify merchant
- Customers don't recognize charge when reviewing statements
- Descriptors change frequently
Why this is critical risk: Unclear descriptors drive purchase denial chargebacks. Customers who don't recognize charges dispute them, claiming fraud.
No Purchase Confirmation or Receipts
- Transactions complete without confirmation email
- No itemized receipts
- No transaction history visible to customer
- Customers cannot verify what they purchased
Why this is high risk: Without transaction documentation, customers legitimately cannot verify charges and may dispute them.
Subscription Billing Without Clear Disclosure
- Free trial converts to paid subscription without clear warning
- Subscription terms buried in fine print
- No reminder before renewal charge
- Difficult cancellation procedures
Why this is critical risk: Surprise subscription charges generate chargebacks and regulatory scrutiny. Consumer protection laws require clear subscription disclosures.
Aggressive Upselling During Purchase
- Multiple upsells during checkout
- Pre-checked boxes adding unwanted subscriptions
- Confusing purchase flow leading to unintended purchases
- Dark patterns designed to maximize charges
Why this is high risk: Deceptive billing practices generate chargebacks, regulatory complaints, and reputational harm.
No Customer Service
- No phone number or email for customer support
- Support requests ignored or slow response (>48 hours)
- Refund requests denied without cause
- Customers forced to chargeback to get resolution
Why this is critical risk: When customers cannot reach merchant for resolution, they file chargebacks. Accessible customer service prevents disputes from becoming chargebacks.
Acceptable Chargeback Prevention Systems
Clear and Descriptive Transaction Descriptors
- Descriptor clearly identifies merchant and indicates adult content
- Consistent descriptor across all transactions
- Company name recognizable from marketing materials
- Phone number in descriptor for customer contact
Why this is acceptable: Clear descriptors reduce purchase denial by helping customers recognize legitimate charges.
Robust Purchase Confirmation and Documentation
- Immediate email confirmation upon purchase
- Itemized receipt showing what was purchased
- Transaction history accessible in customer account
- Clear contact information for support
Why this is acceptable: Transaction documentation enables customers to verify charges and reduces disputes.
Transparent Subscription Billing
- Clear disclosure of subscription terms at checkout
- Checkbox confirmation of subscription (not pre-checked)
- Email reminder before renewal charge
- Easy cancellation process (no dark patterns)
- Clear cancellation confirmation
Why this is acceptable: Transparent subscription practices comply with consumer protection laws and reduce chargeback risk.
Accessible Customer Service
- Phone number and email clearly displayed
- Response to support requests within 24 hours
- Refund policy clearly stated
- Willingness to issue refunds for legitimate complaints rather than force chargebacks
Why this is acceptable: Accessible support resolves issues before they become chargebacks.
Chargeback Alert and Response Systems
- Integration with chargeback alert systems (Ethoca, Verifi)
- Proactive refunds for alerted disputes (preventing chargeback)
- Rapid response to chargebacks with compelling evidence
- Chargeback reason code analysis to identify trends
Why this is acceptable: Proactive chargeback management reduces ratios and identifies systemic issues.
Fraud Prevention Tools
- Address Verification System (AVS) checks
- Card Verification Value (CVV) requirements
- Velocity checks (unusual transaction patterns)
- Device fingerprinting and fraud scoring
- 3D Secure authentication for high-risk transactions
Why this is acceptable: Fraud prevention reduces unauthorized transactions, which generate chargebacks.
What to Request from Merchant
| Transaction Descriptor |
- Exact descriptor used on customer statements
- Consistency across transactions
- Customer recognition testing
|
| Purchase Confirmation |
- Sample purchase confirmation emails
- Receipt format
- Transaction history interface screenshots
|
| Subscription Billing |
- Complete subscription terms disclosure
- Cancellation procedures
- Pre-renewal notification examples
- Cancellation confirmation process
|
| Customer Service |
- Support contact information
- Response time SLAs
- Support ticket volume and resolution data
- Refund policy
|
| Chargeback Data |
- Last 12 months chargeback ratios by month
- Chargeback reason code breakdown
- Win rate for contested chargebacks
- Trend analysis
|
| Chargeback Prevention |
- Integration with chargeback alert systems
- Fraud prevention tools deployed
- Chargeback response procedures
- Staff training on chargeback management
|
Investigation and Testing Protocol
Descriptor Clarity Testing
Test transaction descriptor clarity:
- Make test purchase (with merchant cooperation):
- Complete transaction
- Review credit card statement
- Is descriptor clear and recognizable?
- Does it indicate adult content?
- Customer perspective:
- Would an average customer recognize this charge?
- Is company name clear?
- Is support phone number included?
Purchase Flow Review
Test the complete purchase experience:
- Complete test purchase:
- Navigate checkout process
- Document all steps and disclosures
- Are subscription terms clear?
- Are there unwanted upsells or pre-checked boxes?
- Review purchase confirmation:
- Is confirmation email sent immediately?
- Does it include itemized receipt?
- Is support contact information included?
- Test transaction history:
- Can customer view past transactions in account?
- Is information clear and complete?
Subscription Testing
For subscription-based merchants:
- Subscribe to service:
- Document subscription disclosure at checkout
- Was checkbox confirmation required?
- Were terms clear?
- Monitor pre-renewal notification:
- Does merchant send reminder before renewal?
- How much advance notice?
- Test cancellation:
- Attempt to cancel subscription
- Is cancellation easy or obfuscated?
- Is cancellation confirmed?
Customer Service Testing
Test customer support responsiveness:
- Submit support request:
- Send email or call support
- Time response
- Target: Response within 24 hours
- Request refund (if appropriate):
- Submit legitimate refund request
- Is refund granted or denied?
- How long does resolution take?
Chargeback Ratio Analysis
Review historical chargeback data:
| <0.5% |
Low |
Acceptable |
| 0.5%–0.9% |
Medium |
Monitor closely |
| 0.9%–1.5% |
High |
Require improvement plan |
| >1.5% |
Critical |
Likely decline or require reserves |
Note: Adult content merchants typically have higher chargeback ratios than low-risk categories. Benchmarks should be adjusted accordingly, but >1.5% indicates systemic issues.
Reason Code Analysis
Review chargeback reason codes to identify issues:
| Fraud (10.4, 4837) |
Unauthorized transactions |
Implement fraud prevention tools |
| Authorization (11.1, 4808) |
Authorization issues |
Fix authorization workflow |
| Processing Errors (12.x, 48xx) |
Technical or process issues |
Fix processing systems |
| Consumer Disputes (13.x, 41xx) |
Purchase denial, subscription disputes |
Improve descriptors, disclosure, customer service |
If one reason code dominates, targeted fixes can reduce chargebacks.
Merchant Assessment Checklist
Transaction and Chargeback Assessment Checklist
- Transaction Clarity
- Descriptor clearly identifies merchant and indicates adult content
- Descriptor consistent across transactions
- Support phone number included in descriptor
- Descriptor tested and recognizable to customers
- Purchase Documentation
- Immediate purchase confirmation email sent
- Itemized receipts provided
- Transaction history accessible in customer account
- Support contact information clearly displayed
- Subscription Practices
- Clear subscription disclosure at checkout
- Checkbox confirmation required and not pre-checked
- Pre-renewal notification sent
- Easy cancellation process available
- Cancellation confirmation provided
- Customer Service
- Support contact information clearly displayed
- Response within 24 hours
- Refund policy clear and fair
- Willingness to resolve issues rather than force chargebacks
- Chargeback Management
- Chargeback ratio below 1 percent or showing improving trend
- Integration with chargeback alert systems
- Rapid response to disputes
- Reason code analysis performed to identify trends
- Documented improvement plans in place
- Fraud Prevention
- AVS and CVV checks enabled
- Velocity monitoring implemented
- Device fingerprinting in use
- 3D Secure applied for high risk transactions
Red flag threshold:
- Chargeback ratio >1.5% with no improvement plan = CRITICAL RISK
- Unclear transaction descriptors = HIGH RISK
- No purchase confirmation emails = HIGH RISK
- Deceptive subscription practices = CRITICAL RISK (likely decline)
- No accessible customer service = HIGH RISK
- Chargeback ratio increasing month-over-month = HIGH RISK
For fintech platforms processing adult content, sophisticated chargeback prevention is essential to maintaining processing relationships.
5. Marketing and Consumer Protection Standards
Why it matters: Adult content marketing must balance effective customer acquisition with regulatory compliance and consumer protection. Marketing practices that mislead consumers, target minors, or violate advertising standards create legal and reputational risk for payment processors.
High-Risk Marketing Practices
Misleading Advertising
- Claims content is "free" when subscription is required
- Bait-and-switch tactics (advertise free content, require payment)
- False claims about content quality or quantity
- Fake testimonials or reviews
Why this is high risk: Misleading advertising violates FTC regulations and generates consumer complaints and chargebacks.
Youth-Oriented Marketing
- Advertising on platforms popular with minors (TikTok, Snapchat)
- Use of youth-appealing imagery, language, or influencers
- Cartoon or animated characters in adult content marketing
- No age targeting restrictions on paid advertising
Why this is critical risk: Marketing that appeals to or reaches minors creates massive liability and reputational harm.
No Age Restrictions on Marketing Channels
- Social media advertising without 18+ age targeting
- Display advertising on general-audience websites
- Email marketing to purchased lists without age verification
- Influencer marketing using influencers with large minor followings
Why this is high risk: Adult content marketing must be age-restricted at every touchpoint, not just on the final site.
Spam and Aggressive Marketing
- Unsolicited email marketing (spam)
- Pop-under ads or malware distribution
- Misleading ad creatives that trick users into clicking
- Cookie-stuffing or other deceptive affiliate tactics
Why this is high risk: Spam and aggressive marketing generate complaints, blacklisting, and regulatory scrutiny.
Failure to Disclose Affiliate Relationships
- Influencers or reviewers promote content without disclosing compensation
- Affiliate marketing presented as organic recommendations
- No "sponsored" or "ad" disclosures
Why this is high risk: FTC requires clear disclosure of material connections between endorsers and advertisers. Failure to disclose creates regulatory liability.
Source: FTC Endorsement Guides
Acceptable Marketing Practices
Clear and Honest Advertising
- Advertising accurately represents content and pricing
- No bait-and-switch or misleading claims
- Clear disclosure of subscription terms
- Authentic reviews and testimonials
Why this is acceptable: Honest advertising complies with consumer protection laws and reduces disputes.
Age-Restricted Marketing Channels
- Social media ads target 18+ only
- Display ads only on adult-focused websites
- Email marketing to opt-in lists with age verification
- No marketing on platforms popular with minors
Why this is acceptable: Age-restricted marketing prevents minor exposure and demonstrates compliance intent.
Respectful and Non-Aggressive Marketing
- Opt-in email marketing only
- Unsubscribe options clearly displayed
- No spam, malware, or deceptive tactics
- Frequency caps to prevent overwhelming users
Why this is acceptable: Respectful marketing builds brand reputation and reduces complaints.
Proper Affiliate Disclosures
- Influencers and affiliates clearly disclose compensation
- "Sponsored" or "ad" labels on paid content
- Compliance with FTC endorsement guidelines
Why this is acceptable: Proper disclosures comply with regulations and maintain consumer trust.
Geographic Compliance
- Marketing complies with local advertising laws
- Age verification requirements vary by jurisdiction (some require 21+)
- Geo-targeted marketing respects local standards
Why this is acceptable: Geographic compliance reduces regulatory risk in multiple jurisdictions.
What to Request from Merchant
| Marketing Materials |
- Examples of all advertising including display ads, social media, and email
- Ad creative review
- Messaging and claims analysis
- Target audience documentation
|
| Age Targeting |
- Age restrictions applied across all marketing channels
- Platform targeting settings
- Documentation showing 18+ or 21+ targeting
- Evidence that ads do not appear on youth oriented platforms
|
| Affiliate Marketing |
- List of affiliates and influencers
- Affiliate agreement templates
- Disclosure requirements included in agreements
- Monitoring for disclosure compliance
|
| Email Marketing |
- Email list source including opt in or purchased lists
- Age verification for email subscribers
- Unsubscribe rate and process
- Spam complaint rate
|
| Consumer Complaints |
- Consumer complaint volume and trend analysis
- Better Business Bureau profile
- Response handling for complaints
- Regulatory complaints or investigations
|
Investigation and Testing Protocol
Marketing Material Review
Review all marketing materials for compliance:
- Ad creative analysis:
- Request examples of display ads, social media ads, email campaigns
- Review for misleading claims, youth appeal, or deceptive tactics
- Verify pricing and subscription terms are clearly disclosed
- Target audience verification:
- Check social media ad targeting settings
- Verify 18+ or 21+ age restrictions
- Confirm ads don't appear on youth-oriented platforms
Affiliate Program Review
If affiliate marketing is used:
- Affiliate agreement review:
- Do agreements require FTC disclosure compliance?
- Are affiliates prohibited from spam or deceptive tactics?
- Are affiliates monitored for compliance?
- Influencer disclosure testing:
- Review influencer posts promoting merchant
- Are disclosures clear ("sponsored," "ad," "partner")?
- Do posts comply with FTC guidelines?
Consumer Complaint Research
Research consumer sentiment and complaints:
- BBB lookup:
- Consumer review sites:
- Search Trustpilot, Sitejabber, etc.
- Look for patterns in complaints (billing issues, misleading marketing)
- Regulatory action search:
- Search FTC enforcement database
- Search state Attorney General consumer protection actions
- Any cease-and-desist letters or enforcement?
Spam Complaint Analysis
For email marketing:
- Spam complaint rate:
- Request spam complaint data from email service provider
- Target: <0.1% complaint rate
- High complaint rate indicates poor list quality or aggressive tactics
- Unsubscribe rate:
- High unsubscribe rate suggests irrelevant or unwanted emails
- Target: <2% unsubscribe rate per campaign
Merchant Assessment Checklist
- Advertising Honesty
- Advertising accurately represents content and pricing
- No misleading claims or bait and switch practices
- Subscription terms clearly disclosed
- Testimonials and reviews are authentic
- Age Targeting
- All marketing channels restricted to 18 plus or 21 plus where required
- No marketing on youth oriented platforms
- Age targeting verified on paid advertising
- Geographic compliance with local advertising laws
- Marketing Ethics
- Email marketing is opt in only
- No spam malware or deceptive tactics
- Unsubscribe options clearly displayed
- Frequency caps in place to prevent overwhelming users
- Affiliate Compliance
- Affiliates required to disclose compensation
- Affiliate agreements include FTC compliance requirements
- Monitoring in place for affiliate compliance
- No spam or deceptive affiliate tactics
- Consumer Complaints
- Low complaint volume on BBB and review sites
- Responsive handling of consumer complaints
- No regulatory actions or investigations
- Positive complaint resolution patterns
Red flag threshold:
- Youth-oriented marketing = CRITICAL RISK (Auto-decline)
- No age targeting on advertising = HIGH RISK
- Misleading advertising or bait-and-switch = HIGH RISK
- High spam complaint rate (>0.5%) = HIGH RISK
- Multiple BBB complaints with poor resolution = HIGH RISK
- FTC or state AG enforcement action = CRITICAL RISK
6. Platform Governance and Takedown Procedures
Why it matters: Even with robust prevention systems, violations will occur. The quality of a platform's response to violations determines whether isolated incidents become systemic problems. Effective governance requires documented procedures, rapid response, and consistent enforcement.
Policy documents without enforcement evidence are meaningless.
High-Risk Governance Patterns
Policy PDFs Without Enforcement Data
- Platform provides comprehensive policy documents
- Policies prohibit illegal content, require age verification, etc.
- BUT: No evidence policies are actually enforced
- No data on violations detected, accounts terminated, content removed
Why this is critical risk: Policies that exist only on paper do not prevent harm. Evidence of enforcement is required to demonstrate policies are operational.
Slow Response to Violations
- Takedown requests take days or weeks
- No prioritization for severe violations (CSAM, non-consensual content)
- Response times measured in business days, not hours
- No 24/7 monitoring or emergency response capability
Why this is critical risk: Illegal content causes harm with every hour it remains online. Slow response indicates inadequate governance.
Inconsistent Enforcement
- Some violations result in account termination, others in warnings
- No clear criteria for enforcement decisions
- Similar violations treated differently
- Enforcement appears arbitrary or selective
Why this is high risk: Inconsistent enforcement indicates lack of process maturity and creates legal liability (claims of selective enforcement).
No Escalation Procedures
- All violations handled the same way
- No distinction between minor violations and severe crimes
- No law enforcement cooperation procedures
- No executive escalation for severe incidents
Why this is high risk: Severe violations require different response than minor policy violations. Lack of escalation suggests governance immaturity.
No Transparency or Reporting
- Platform does not publish transparency reports
- No public data on content moderation volumes
- No accountability to users or public
- Operates in complete opacity
Why this is high risk: Transparency demonstrates commitment to governance and allows external accountability.
Acceptable Governance Systems
Documented Policies with Enforcement Evidence
- Clear, comprehensive policies exist
- AND: Platform can provide enforcement data
- Metrics on violations detected, content removed, accounts terminated
- Regular reporting on governance activities
Why this is acceptable: Policies backed by enforcement data demonstrate operational governance.
Rapid Response to Severe Violations
- CSAM takedown within 1 hour
- Non-consensual content takedown within 24 hours
- Severe violations escalated immediately
- 24/7 monitoring or emergency response capability
Why this is acceptable: Rapid response minimizes harm and demonstrates prioritization of safety.
Clear and Consistent Enforcement
- Written enforcement guidelines
- Violation severity matrix (minor vs. severe)
- Consistent application of policies
- Regular training for enforcement staff
Why this is acceptable: Consistent enforcement demonstrates process maturity and reduces legal risk.
Tiered Escalation Procedures
- Minor violations: warnings or temporary suspensions
- Moderate violations: longer suspensions, content removal
- Severe violations: immediate account termination, law enforcement reporting
- Crisis escalation to executive leadership
Why this is acceptable: Tiered response matches severity of violation and enables appropriate escalation.
Transparency Reporting
- Regular transparency reports (quarterly or annual)
- Data on content moderation volumes, violation types, enforcement actions
- Publicly available or shared with processors/partners
- Demonstrates accountability
Why this is acceptable: Transparency enables external accountability and builds trust.
Law Enforcement Cooperation
- Clear procedures for cooperating with law enforcement
- Legal counsel involved in criminal matters
- CyberTipline reporting for CSAM
- Preservation of evidence for criminal investigations
Why this is required: Platforms must cooperate with law enforcement on criminal matters. Documented procedures demonstrate commitment.
What to Request from Merchant
| Policy Documentation |
- Complete policy manual covering all prohibited content and behavior
- Enforcement guidelines describing how policies are applied
- Violation severity matrix
- Training materials for enforcement staff
|
| Enforcement Data |
- Last 12 months enforcement statistics
- Content removals by violation type
- Account suspensions
- Account terminations
- Law enforcement reports filed
|
| Response Time SLAs |
- Documented service level agreements by violation type
- Target response times
- Historical performance measured against SLAs
|
| Escalation Procedures |
- Documented escalation matrix
- Defined ownership by violation type
- Emergency escalation procedures
- Executive involvement criteria
|
| Transparency Reporting |
- Historical transparency reports if published
- Internal governance reports
- Defined reporting cadence
|
| Law Enforcement Cooperation |
- Procedures for responding to law enforcement requests
- Legal counsel involvement process
- Evidence preservation procedures
- Historical cooperation examples, anonymized
|
Investigation and Testing Protocol
Policy Enforcement Validation
Test whether policies translate to operational enforcement:
- Request enforcement data:
- Volume of violations detected (by type)
- Content removal statistics
- Account termination statistics
- Trends over time
- Analyze enforcement patterns:
- Is enforcement happening regularly?
- Are certain violation types not enforced? (gaps in coverage)
- Is enforcement increasing or decreasing? (improving or degrading?)
- Request examples (anonymized):
- Sample violations and how they were handled
- Demonstrates enforcement actually occurs
Response Time Testing
Test response to reported violations:
- Submit test report (with merchant cooperation):
- Report specific content for policy violation
- Time response from report to resolution
- Compare to documented SLAs
- Review historical response times:
- Request data on average response times by violation type
Compare to industry benchmarks:
- CSAM: <1 hour
- Non-consensual content: <24 hours
- Other violations: <72 hours
Escalation Procedure Verification
Verify that escalation procedures exist and are followed:
- Review escalation matrix:
- Who is involved in different severity violations?
- At what point does legal counsel get involved?
- When are law enforcement contacted?
- Request escalation examples:
- Anonymized examples of severe violations that triggered escalation
- How were they handled?
- What was the outcome?
Transparency Report Review
If transparency reports exist:
- Review content:
- What metrics are reported?
- Trends over time
- Comparison to industry benchmarks
- Assess credibility:
- Are numbers realistic?
- Do they show continuous improvement?
- Are problem areas acknowledged?
If no transparency reports exist:
- Request internal governance reports
- Assess willingness to share enforcement data
Law Enforcement Cooperation Verification
Verify cooperation procedures:
- Review procedures:
- How does platform respond to law enforcement requests?
- Legal process followed?
- Evidence preservation?
- Verify CyberTipline reporting:
- Historical reports filed (if any)
- Demonstrates cooperation commitment
Merchant Assessment Checklist
- Policy Documentation
- Comprehensive policies covering all prohibited content and behavior
- Enforcement guidelines clearly documented
- Violation severity matrix exists
- Regular training conducted for enforcement staff
- Enforcement Evidence
- Ability to provide enforcement statistics including content removals and account terminations
- Enforcement occurs on an ongoing basis and is not purely reactive
- Examples of past enforcement actions available
- Enforcement trends show stable or improving outcomes
- Response Time Performance
- CSAM takedown completed within 1 hour
- Non consensual content takedown completed within 24 hours
- Other violations resolved within 72 hours
- Historical response times meet documented SLAs
- Escalation Capability
- Tiered escalation procedures are documented
- Legal counsel involved in severe cases
- Law enforcement reporting procedures exist
- Executive escalation procedures for crisis situations
- Transparency
- Transparency reports published or internal reports available
- Enforcement data shared with partners or processors
- Clear accountability to external stakeholders
- Law Enforcement Cooperation
- Clear procedures for law enforcement cooperation
- CyberTipline reporting in place where applicable
- Evidence preservation procedures documented
- Historical examples of law enforcement cooperation available
Red flag threshold:
- No enforcement data available = CRITICAL RISK
- Policies exist but no evidence of enforcement = CRITICAL RISK
- Response time to CSAM >24 hours = CRITICAL RISK
- Response time to non-consensual content >72 hours = HIGH RISK
- No escalation procedures = HIGH RISK
- No law enforcement cooperation procedures = HIGH RISK
- Unwilling to share enforcement data = HIGH RISK
What Good Looks Like: The Defensible Adult Content Operator
When all elements align properly, a defensible adult content operator presents:
Complete Documentation Package
| Age Verification |
- Government issued ID verification using reputable third party vendors such as Jumio, Onfido, or Trulioo
- Liveness detection and face matching
- Verification required before any content access
- Evidence of verification rejections proving the system works
- Re verification triggers for suspicious behavior
- Third party audit or penetration testing
|
| Content Moderation |
- Pre upload scanning with PhotoDNA or equivalent CSAM detection
- CyberTipline reporter status with evidence of historical reports
- AI classification for policy violations
- Human moderation team staffed appropriately
- Content removal statistics available
- Takedown times meet benchmarks including CSAM under 1 hour and other violations under 72 hours
|
| Consent Verification |
- 2257 record keeping compliance with a designated custodian
- Identity verification required for all content participants
- Affirmative consent documented before publication
- Model releases collected for professional content
- Consent revocation procedures with takedown under 24 hours
- Law enforcement cooperation on non consensual content
|
| Chargeback Prevention |
- Clear transaction descriptors indicating adult content
- Immediate purchase confirmation and receipts
- Transparent subscription billing with pre renewal notifications
- Accessible customer service with response within 24 hours
- Chargeback ratio below 1 percent or showing an improving trend
- Integration with chargeback alert systems
|
| Marketing Standards |
- Honest advertising with no misleading claims
- All marketing age restricted to 18 plus or 21 plus where required
- No youth oriented marketing or platforms
- Proper affiliate disclosures per FTC guidelines
- Low consumer complaint volume
- No regulatory enforcement actions
|
| Platform Governance |
- Documented policies with evidence of enforcement
- Enforcement statistics available including removals and terminations
- Response times meet defined benchmarks
- Tiered escalation procedures in place
- Transparency reporting either internal or public
- Law enforcement cooperation procedures documented
|
Example: Defensible Operator Profile
Company: Premium Adult Platform Inc.
Business Model: Professionally produced adult content subscription service
Processing History: 3+ years with current processor, strong performance
Value Proposition:
"We provide premium adult entertainment content created by professional studios with full model releases and 2257 compliance. All content features consenting adult performers with documented age verification. Our platform implements industry-leading age verification, content moderation, and consumer protection measures."
Age Verification:
- Jumio integration for government ID verification
- Liveness detection and face matching
- 95% verification completion rate among legitimate users
- 3% rejection rate (detecting minors and fake IDs)
- Third-party penetration test in last 12 months (report available)
Content Moderation:
- PhotoDNA integration for CSAM detection
- CyberTipline reporter (5 reports filed in last 3 years, all investigated)
- 15 FTE content moderators for 50,000 daily content views
- 2,400 policy violations detected and removed in last 12 months
- Average takedown time: 4 hours for non-emergency, <30 minutes for CSAM
Consent and 2257 Compliance:
- Designated custodian of records with complete documentation
- All content from licensed studios with model releases
- No user-generated content (eliminates consent risk)
- Can provide sample 2257 records (redacted) for verification
- External compliance audit completed annually
Chargeback Performance:
- 0.6% chargeback ratio (stable over 12 months)
- Clear descriptor: "PREMIUMADULT.COM 555-1234"
- Immediate email confirmations and receipts
- Transparent subscription billing with 7-day pre-renewal notification
- Customer service response time: 8 hour average
- Ethoca and Verifi integration with 40% alert refund rate
Marketing:
- Age-restricted advertising on all platforms (21+ targeting)
- No marketing on youth-oriented platforms
- Clear subscription disclosures
- BBB rating: A+ with 12 complaints resolved in last 12 months
- No regulatory actions
Governance:
- Published transparency report (annual)
- 2,400 content removals, 300 account terminations in last 12 months
- Response time SLAs documented and met
- Escalation procedures include legal counsel and executive leadership
- Law enforcement cooperation procedures documented
This profile represents defensible adult content processing.
The key elements:
- Every control is tested, not just documented
- Enforcement data proves policies are operational
- Response times meet industry benchmarks
- Third-party validation where available
- Transparency and accountability
Common Misses: Policy Without Enforcement
Understanding where adult content underwriting typically fails prevents onboarding operators without operational controls.
Miss #1: Policy PDF Defense
The Error: Accepting comprehensive policy documents as evidence of compliance without testing or verifying enforcement.
What happens: Operator provides 50-page policy manual covering age verification, content moderation, consent, etc. Underwriter reviews policies, sees they prohibit illegal content and require age verification. Policies look comprehensive. Approved.
What's missed: The policies exist only on paper. Testing reveals age verification can be bypassed with checkbox. No content moderation system is actually deployed. No enforcement has ever occurred.
The Fix: Test controls, don't just read policies.
Required validation:
- Test age verification by attempting bypass
- Request enforcement statistics proving policies are applied
- Verify technology integrations claimed in policies (PhotoDNA, ID verification vendors)
- Request examples of enforcement actions
Miss #2: "Industry Standard" Claims Without Verification
The Error: Accepting claims of "industry-standard" compliance without verifying what standards are actually implemented.
What happens: Operator claims "we follow industry-standard age verification and content moderation practices." Underwriter assumes this means robust controls. Approved.
What's missed: "Industry standard" is undefined and varies widely. Operator may consider checkbox age verification "industry standard" while processor expects government ID verification.
The Fix: Define specific control requirements, don't accept vague claims.
Required validation:
- Define exactly what controls are required (government ID verification, PhotoDNA, etc.)
- Verify specific technologies are actually deployed
- Require documentation of integration and enforcement
- Don't accept "industry standard" as substitute for specific controls
Miss #3: Professional Content Safe Harbor
The Error: Assuming professionally produced studio content is inherently lower risk and requires less scrutiny.
What happens: Operator distributes content from established adult studios. Underwriter assumes studio content is properly documented and compliant. Less rigorous due diligence applied. Approved.
What's missed: Studio content can still have compliance issues (performer age verification, consent documentation, 2257 record-keeping). Platform must verify studios provide proper documentation. Even professional content platforms need age gating, content moderation, and governance.
The Fix: Professional content requires different diligence, not less diligence.
Required validation:
- Verify platform collects model releases and 2257 documentation from studios
- Verify platform has age verification for users (even for professionally produced content)
- Verify platform has content moderation to detect if studios provide non-compliant content
- Verify platform governance systems are operational
Miss #4: Single Control Focus
The Error: Focusing exclusively on one control (typically age verification) without assessing other critical areas.
What happens: Underwriter conducts thorough age verification assessment. Operator has robust ID verification. Approved based on strong age verification alone.
What's missed: Operator has no content moderation system. CSAM could be uploaded without detection. No consent verification for user-generated content. High chargeback rate due to poor billing practices.
The Fix: Comprehensive assessment across all control areas.
Required validation:
- Age verification AND content moderation AND consent verification AND chargeback prevention AND marketing standards AND governance
- All six framework areas must pass assessment
- Strong performance in one area does not compensate for failure in another
Miss #5: Post-Onboarding Monitoring Gaps
The Error: Conducting thorough due diligence during underwriting but failing to monitor for compliance degradation post-onboarding.
What happens: Operator passes rigorous underwriting assessment. Controls are tested and verified. Approved. Six months later, controls have degraded: age verification vendor contract expired and wasn't renewed, content moderation staff laid off, enforcement stopped.
What's missed: Ongoing monitoring is required to detect compliance degradation.
The Fix: Continuous merchant monitoring with specific triggers.
Required monitoring:
- Quarterly reviews of enforcement statistics
- Chargeback ratio monitoring (monthly)
- Consumer complaint monitoring
- Technology integration monitoring (verify vendors still in use)
- Annual re-verification of key controls
Your First Questions: Testing Controls, Not Promises
When evaluating adult content operators, these questions require definitive answers backed by evidence:
Age Verification Questions
- "Which third-party age verification vendor do you use?"
- Acceptable: "Jumio" or another reputable vendor
- Red flag: "We built our own system" or "Users enter their DOB"
- "Show me verification rejection data from the last 6 months."
- Must provide: Number of verification attempts, number rejected, rejection reasons
- If no rejections exist, the system doesn't work
- "Can I test your age verification system by attempting to bypass it?"
- Acceptable: "Yes, we welcome testing"
- Red flag: "That's not necessary" or refusal
Content Moderation Questions
- "Are you a CyberTipline reporter? How many CSAM reports have you filed?"
- Acceptable: "Yes, we've filed X reports" (with documentation)
- Red flag: "We don't have CSAM on our platform" (everyone does eventually without detection)
- Critical: "No" or "We're not registered"
- "Show me content removal statistics for the last 12 months broken down by violation type."
- Must provide: Volumes by violation category, trends, enforcement actions
- If no removals, content moderation isn't functioning
- "What technology do you use for automated CSAM detection?"
- Acceptable: "PhotoDNA" or equivalent
- Red flag: "Manual review only" or "User reports"
Consent Verification Questions
- "Who is your designated 2257 custodian of records? Can I see sample records?"
- Must provide: Custodian name and contact, sample records (redacted)
- Red flag: "We don't maintain 2257 records" (illegal for US producers)
- "For user-generated content, how do you verify all participants consented?"
- Acceptable: "All participants must create verified accounts and consent to each upload"
- Red flag: "Uploader certifies consent" (no verification)
Chargeback Prevention Questions
- "What is your current chargeback ratio? Show me 12 months of data."
- Must provide: Monthly chargeback ratios, trending
- Red flag: >1.5% or unwillingness to share data
- "What does your transaction descriptor look like on customer statements?" - Must show: Actual descriptor from test transaction - Red flag: Unclear or misleading descriptor
Governance Questions
- "Show me your last transparency report or internal governance report." - Must provide: Enforcement statistics, response times, trends - Red flag: "We don't track that" or "It's confidential"
- "Walk me through your response procedure for a non-consensual content report." - Must provide: Step-by-step procedure, documented SLAs, examples - Red flag: "We handle it case-by-case" (no process)
The Testing Requirement
"Which control do you require to be tested, not promised?"
The answer should be: All of them.
Every critical control must be tested during underwriting:
- Test age verification by attempting bypass
- Verify content moderation by reviewing enforcement data
- Verify 2257 compliance by reviewing sample records
- Test chargeback prevention by reviewing transaction descriptors and customer service response
- Verify governance by reviewing enforcement statistics and response procedures
Promises without testing are not due diligence.
Ballerine's Role
Ballerine provides the infrastructure to make this complex assessment manageable: automated testing of age verification systems, continuous monitoring of enforcement data, chargeback ratio tracking, and merchant monitoring that detects compliance degradation. But the foundational knowledge in this guide gives you the expertise to ask the right questions, test the right controls, and defend your underwriting decisions based on evidence rather than category avoidance.
For sophisticated risk assessment of adult content merchants at scale, our platform enables testing controls during onboarding and continuous validation post-approval. Partner oversight ensures indirect merchant relationships maintain the same rigor.
The bottom line: Adult content underwriting is not a moral judgment about content categories. It's governance assessment based on tested controls, enforcement evidence, and operational reality. You draw the line between acceptable and unacceptable operators at the point where controls shift from documented policies to tested, enforced, continuously monitored systems. Test the controls, verify the enforcement, and let evidence guide your decision.
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