By Robin Sidel And Mark Peters
CHICAGO-- MasterCard Inc. said it has stopped processing ad
purchases on Backpage.com, as payment-card networks become the
latest front for public officials trying to crack down on the adult
section of the controversial classified-ads website.
Backpage has long been under fire from law-enforcement
officials, attorneys general and members of Congress who say the
website helps fuel the illegal sex industry. And while public
pressure helped force its spinoff from Village Voice Media Holdings
LLC in 2012, the website has largely prevailed in the courts and
public officials argue federal law needs to be changed to curb the
sex trade on classified sites.
Cook County Sheriff Thomas J. Dart sent a letter on Monday to
MasterCard and Visa Inc., asking them to "immediately cease and
desist from allowing your credit cards to be used to place ads on
websites like Backpage.com, which we have objectively found to
promote prostitution and facilitate online sex trafficking,"
according to the letter released by the sheriff's office.
"They are being removed as a merchant in our system based on a
request from the sheriff's office that we received," a MasterCard
spokesman said on Tuesday.
American Express Co. stopped processing ads on the "adult"
portion of the site earlier this year, according to people familiar
with the matter. A spokesman for Visa didn't immediately respond to
a request for comment.
Visa and MasterCard, the two biggest card-processing networks,
have latitude to decide if they will process certain types of
transactions. Both companies have refused, for example, to allow
their cards to be used to buy marijuana in states where it is legal
because those purchases are still prohibited by federal law.
Visa and MasterCard will process online-gambling transactions in
places where it is legal. But many card issuers don't allow their
customers to use plastic for online gaming.
The card networks don't follow the same type of
"know-your-customer" rules as banks. Instead, they set rules that
are to be followed by the companies that process card transactions
on behalf of merchants.
Mr. Dart, whose county is the nation's second-most populous, in
the letter to the credit-card companies said allowing such
transactions on Backpage provides a sense of normalcy to the sex
industry and helps fuel demand for such illegal transactions. The
sheriff is expected to release further information on his efforts
surrounding credit cards and adult ads Wednesday.
Backpage.com didn't respond to requests for comment.
Pressure has been building over the website in recent years with
attorneys general from 21 states calling on the site in 2010 to
close its adult-services section. Two years later, Backpage.com was
split off from a chain of 13 alternative newspapers, including
Village Voice and LA Weekly, as controversy over the classified
site grew. The company was then sold late last year to a Dutch
company, according to federal officials.
Write to Robin Sidel at robin.sidel@wsj.com and Mark Peters at
mark.peters@wsj.com
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