New Domains For Sex Sites Could Foster Greater Legitimacy

This article appears to be derived from a sales pitch from the .xxx registrar. It’s full of idealist comments and bogus claims. For example:

… while pornographers, at least in the United States, can’t and shouldn’t be forced to adopt .XXX domains, they’ll find advantages to doing so.
…
“By regularizing business practices so that you’ll have dispute resolution and appropriate and secure use credit cards–the kinds of things that any E-commerce site would have–we expect that [merchant-account] rates will come down.” Customers, in turn, could visit porn sites with less fear of credit-card fraud.
…
“Right now, if you go to a porn site, they sell your name to anybody and everybody,” she says. “But building privacy and security into .XXX sites will play a large part in regularizing that industry.”

Sounds great, right? .XXX will mean less credit card fraud and more privacy and security! The truth is, it is more likely to cure cancer than do anything promised here. The very idea that customers would feel more comfortable with a porn site ending with .xxx is laughable.

There’s very little chance that the .XXX registrar will be able to staff enough people to verify that the owners of their domains are “good actors”. It would be an incredibly time consuming process, and most porn site operators aren’t going to want to hand over their merchant account records (chargeback rates, etc.) or their email logs (not that mail logs can actually help identify spam).

You want to know what would help the porn industry a great deal? A sane chargeback solution. As it stands now, if you dispute a charge for a “high risk” retailer (ie, porn), the credit card company will often just take your word for it and issue a chargeback against the merchant. If their merchant account sees a > 1% chargeback ratio, the merchant can end up permanently banned from ever accepting Visa again (I believe Mastercard is the same). It’s very hard to stay under this ratio — measures including delayed billing and even proactive crediting are deployed (In fact, if you have too many credits, you can still get flagged).

Many (I believe most, but I do not have hard statistics) chargebacks are generated either by wives confronting their husbands, and husbands denying visiting porn sites, or by people just calling up to get out of paying for a service. This is a well-known fact; I don’t think I’m revealing some big secret. The problem: Credit card issuers do not automatically cancel your card and issue you a new one. They just issue the chargeback, and let you continue using your card. You’d think they’d be interested in protecting you, since your card is “out there” being used by “hackers”, but no — they make a significant chunk of their income from chargebacks (which cost the merchant per hit).

The solution will probably, unfortunately, require legislation. Card issuers should respond to the claims that a card is being used by a third party by invalidating the card and sending a new one out to their client. They should then turn the information over to the FBI so they can keep track of credit card fraud rings (there are some legitimate chargebacks, for sure, and some groups that do nothing but “steal” credit cards and use ‘em) and trends. Until this is done, credit card fraud, from the merchant end AND the user end, will continue to run rampant.

Security and privacy are as much an issue with “mainstream” sites as they are with porn sites. Solutions here would involve requiring the end user to supply less information and/or cryptographically strong information. Not something any industry is ready to set up yet.

…. Oh wait a second… hey, big surprise … the person they interviewed for this, Perry Aftab, helped to develop the .XXX proposal. It’s all one big ad! Why did I expect anything else from CMP?