It’s a well-known practice for bodybuilders and athletes to illegally use performance-enhancing substances during training. Indeed, it wasn’t so long ago that Lance Armstrong’s cycling legacy crumbled in what the US Anti-Doping Agency (USADA) called “the most sophisticated, professionalized and successful doping program that sport has ever seen.”
While anabolic steroids have legitimate medical uses, they are classified as controlled substances in the United States and many other jurisdictions. As a result, possession or distribution without a valid prescription (or other legal authorization) is illegal. These substances are sometimes misused by individuals seeking to “bulk up” quickly rather than build muscles through a strict regimen of weightlifting and diet. Doctors will typically never prescribe anabolic steroids to young, healthy people to help them build muscles.
In the same vein, selective androgen receptor modulators (SARMs) are a class of therapeutic compounds designed to produce effects similar to anabolic steroids. Unlike traditional steroids, SARMs selectively bind to certain tissues rather than all over the body. Although they were developed with the goal of reducing some of the side effects associated with anabolic steroids, their safety and long-term health effects remain uncertain.
SARMs are frequently marketed as dietary supplements or as “research chemicals.” In the latter case, they are often accompanied by disclaimers stating that they are not for human consumption. However, no SARMs are currently approved by the U.S. Food and Drug Administration (FDA), meaning they cannot legally be marketed as dietary supplements or pharmaceutical drugs.
So, what’s the risk?
There are many risks to financial institutions, payment providers, and marketplaces associated with merchants who illegally import and sell anabolic steroids and SARMs, including the following:
- Merchants selling illegal SARMs or steroids without prescriptions transgress a multitude of laws and regulations in many jurisdictions, exposing payment providers to civil litigation or criminal prosecution.
- Due to the health risks associated with steroid use and consumption of SARMs, the legal repercussions and possible controversies surrounding these illicit sales constitute a reputational risk.
- Online merchants dealing in the sales of anabolic steroids and SARMs are likely engaged in transaction laundering to earn (and hide) revenue.
- Card brands specifically prohibit any type of unlawful activity from entering their payments systems.
Even if they aren’t aware of it, financial institutions or payment providers facilitating the unlawful sale of controlled substances or SARMs risk hefty fines, reputational harm, or disqualification from card brand access.
How payment providers can ensure their payment infrastructure is not being abused for the illicit sale of steroids and SARMs:
- Audit your portfolio for known sellers of pharmaceuticals and nutraceuticals, ensuring that all product offerings comply with regulations per jurisdiction.
- Partner with a Merchant Monitoring Service Provider to track new listings and merchant product listing changes.
- Use tools and procedures to identify suspicious merchants who may be engaged in transaction laundering.
Growing your platform while managing risk
Payment providers and marketplaces must walk a fine line between instituting robust risk controls and operating quickly to drive business. If the compliance control set is too heavy, it can result in large amounts of false-positive notifications, which can slow down business growth or cause a loss of revenue.
AI-driven technology is an essential tool in detecting illicit merchant activities, helping institutions operating in the payments ecosystem to reduce their overall portfolio risk and possible repercussions from major card brands.
At G2 Risk Solutions, our solutions provide actionable insights to help payment providers and marketplaces avoid illicit commerce such as the sale of steroids or SARMs. Our Persistent Merchant Monitoring solution detects high-risk merchants and products before they cause damage to your portfolio.