Credit card giant VISA International has suspended its business with ePassporte, an Internet payment system widely commonly used to pay adult Webmasters and a raft of other affiliate programs.
Company owner Christopher Mallick broke the news to ePassporte customers in an e-mail sent Thursday, saying Visa International had suspended the company’s ePassporte Visa program, which is processed through St. Kitts Nevis Anguilla National Bank.
Dear ePassporte Account Holders,
Please be advised that, at 12:00 PM PDT today, September 2, 2010, we were notified that effective immediately, Visa International has suspended our banking partner’s (St. Kitts Nevis Anguilla National Bank) ePassporte Visa program. The ePassporte e-Wallet program continues to be up and running, except funds cannot be transferred between your Visa Account and your e-Wallet. At this time ePassporte can no longer issue Visa Cards, and the ability for our Account Holders to make point of sale purchases and withdraw funds from ATMs has also been suspended.
At this time we do not know why this drastic action was taken by Visa. To us, it is unconscionable that such action would be taken without the opportunity for ePassporte to fully understand Visa’s reasons and to be able to take all steps necessary to keep our program running the way it has so successfully done for over 7 years. But that is what Visa has done.
As soon as we have more information we will be in contact with you.
In the meantime please be assured that your funds are safe.
We are very sorry for the short notice and apologize for any inconvenience this may cause. The ePassporte team is working diligently to rectify this situation.
We kindly ask you to bear with us while we work through this issue.
Please feel free to contact us via the message center or at our call center, should you have any questions, comments or concerns.
Thank You,
Christopher Mallick
ePassporte’s Visa Virtual Account allowed customers to pay online at any Website that accepted Visa cards. The program also issued customers physical cards that could be used to withdraw cash at ATMs around the globe.
I reached out to both Mallick and Visa for further details and will update this blog if I hear from either.
Update, Sept. 7, 1:07 p.m. ET: Visa just issued the following statement, sent to me via e-mail in response to my request last week for more information:
“At the request of St. Kitts-Nevis-Anguilla National Bank (SKNA), on September 2, 2010, Visa blocked network access for prepaid cards issued by SKNA and operated by ePassporte.com to address certain program deficiencies. ePassporte.com is a third-party agent that works with SKNA.
“It is important to note that impacted SKNA prepaid cardholders are still able to access their funds through SKNA or SKNA’s agent, ePassporte.com. For more information cardholders should contact SKNA or ePassporte.com.
“Visa is committed to maintaining the integrity of its global payment network and routinely conducts due diligence to ensure Visa prepaid programs adhere to the company’s stringent program requirements and controls.”
Original post:
This news caught my attention because I have recently encountered ePassporte accounts tied to several shady affiliate programs, such as those used to reward people who promote rogue anti-virus products and online pharmacy sites.
A number of adult Webmaster forums are buzzing with the news, but few seem to know more than what’s in the statement from ePassporte. However, the administrator of the online forum italkcash.com suggests that the move by Visa is in response to new anti-money laundering requirements mandated by the Credit Card Act of 2009, which affects prepaid cards and other payment card instruments that can be reloaded with funds at places other than financial institutions.
While ePassporte’s Mallick can’t be happy about these developments, the situation may provide a nice bump for his new movie: Mallick helped produce the Paramount film Middle Men, a movie released Aug. 6, 2010 that is based on his personal experiences in the porn Web site billing industry. The synopsis from the film’s Wikipedia entry seems oddly prescient:
In 1995, straight-and-narrow businessman Jack Harris (Luke Wilson) who builds the first online billing company dealing exclusively with adult entertainment, finds himself in the middle of a whirlwind filled with starlets, con men, Russian mobsters, federal agents, and international terrorists. Caught between a porn star and the FBI, Harris learns that even becoming one of the wealthiest entrepreneurs of his generation may not be enough to keep him out of trouble. It is based on the experiences of producer Christopher Mallick.
Click the image below for a Youtube.com trailer of the movie.
And all of this in the middle of my vacation 🙁 This fucked me up, since epass was my main visa 🙁
Any ideas when will this be solved?
Im in the same shit..:(((( When do u think visa will be ok again?:(((( I have bills to pay and dues Gooooooooooooooooooooooooosh!!!!!!!!!!!!!!!!!:(((
I am totally effing screwed. I can’t pay my rent!
I wonder how long it takes..till we get and answer from epassporte of!
I’m thinking that this guy is probably even more ticked off than any of you about this right now 😉
http://krebsonsecurity.com/wp-content/uploads/2010/09/epassout.jpg
I am sure he is pissed off. But my money means just as much to me as it does to him. I am sure the guy who can’t access over 250k is pissed, but so are the rest of us! I WISH the guy can teach me how to make that much money!
Brian I know your just trying to get us to see a different view on the amount of money lost, but please try to understand that each individual feels screwed.
I don’t get the Boogie Nights movie citation here. Give me one good reason why I shouldn’t remove this as OT?
RLY? The relevancy of Boogie Nights to a post involving the porn industry and a film about the same is in question?!
ya me either – remove it lol .. personally i think people are over reacting about this movie .Blaming it all on the dam movie .we all know the move was not the prob here .it was most likly a thing under investagation for a while ,movies usually come out after the shit hits the fan . So ya we all should of seen it comming ,The owner of epassporte no dought did
Brian, please remove that persons idiot comment. There are real people hurting here. Unable to pay my rent. You think my landlord wants to hear my excuses. I feel like I have been robbed at gun point and some jerk wants to make jokes. I’m so pissed and sad
I know that a lot of people are upset by this, but please bear in mind that comments full of profanity and crudity are likely to be deleted or at the very least buried.
maybe u can help on a european girl who know nothing all about this just that she have money on her Epassporte account. how can she move it now?
is there any methods to send the amount…bank wire for example? check idk…iam openminded to any new idea. please let me know if its any posibilites. i heard that eppasorte can fail with out money(i hope its toomuch of afraiding) (isnt it?)
i think many people fighting on forums now with the same question…its ok visa suspended…i dont care..i just want back my money as soon as it posible.
help:(
mayUknowMore, if your money is in the “wallet” of your epassporte account, you can have that money transfered into your bank account. IF your money is located in the Visa electron section, there is no way possible to get that money. Visa has suspended the visa cards, so hopefully you have your money in the wallet. In that case you can contact epassporte to find out what documents they need in order to get your money. Good luck 🙂
I should afraid now? its posible to loose all money??
MayUknowMore, I’m not sure if our money is lost. I would advise you to have another payment option for future payments. Today is a holiday in the usa, and typically banks are closed. So maybe we will all get an answer tomorrow sometime. I am waiting till the end of this week to get an answer. After that, if I don’t here something about getting my money back I will contact a lawyer. Hopefully we get our money back..
My salary is in my epassporte, we are same guys, I will not able to pay my rent and buy foods for my family now I am still waiting for it. But I wonder if it will ever fix? or we just have to forget our funds? my gosh I am in debt now because of epassporte. I hope it will fix as soon as possible.
I simply state you establish some superb ideas and I will submit a number of thoughts to add in briefly.
I feel all your pain. I was actually going to pay a bill online and something told me to check my acct. well i did and im glad i never hit submit
how can they do this without an explanation? We the account holders have done nothing wrong.
Interesting.
Well, to play Devil’s advocate.
Alot of people like porn and most aren’t anyone so revoking services is a tad harsh.
With that said, offshore services such as these are used to fund many other less than savory operations (as Brian indicates in the article). On a bigger picture, its a no brainer as if it funds services such as:
– Rogue AV
– Online Pharmacies (which not all are legit and are peddling products that are unsafe for the public)
– Terrorism
– Other porn (There’s alot of twisted people. They think that they’re not hurting people but indirectly they are with things such as child porn. gang rape, etc – its the Internet, there’s no jurisdictions)
– Organized crime
This crack down isn’t anything different than what the online poker industry faced within the last 2 years.
As for as some of the comments, respectfully maybe it would have been better for Visa to send a general notice and say: these types of accounts will be phased out within 30 days to give people time to get another card.
Unless its part of some master plan to go after or stop criminals right now…in which case I would live with the inconvenience for the greater good.
I understand the reasons why VISA took the unusual steps. Lets face it, the change in Regulation and Mallick’s questionable practices have much to do with this problem. What I do no not think is true is the amount of notice that Mallick had? I have a feeling Mallick knows more but he isn’t saying.
BATSY, since you have experience in this, how much notice did your old Company have? I understand Law enforcement came in with a Court Warrant and physically watched you shut down the cards.
The second question BASTSY, what procedures did the owners of the MC’s did they have to follow to get refunds? How long did it take? I have a feeling the procedures are the same.
I have a number of friends in Eeastern Europe, Ukraine and Romania with these cards, is there special procedures for non-Americans when MC did this?
Brian can you forward this to BATSY?
Everyone reading this should contact their Congressmen. OUR freedoms are being taken all in the name on the “War on Terror”!
Maybe what VISA should do is leave the USA, so it can ignore some of these stupid Laws!
I use to say “Zeig Bush” since I blamed him for the erosion of our Freedoms. It is shocking and sad me to say, “Zeig Obama” for the same reasons! Bush was an idiot but Obama isn’t…..but the end result is the same. WHO IS RUNNING OUR GOVERNMENT?
stepping off Soap Box
So, it’s Tuesday morning. Business is open as usual. Does anyone have any updates?
Ha. Way to mess people around visa. That shiny new visa card that arrived this morning was returned to them chopped into bits this afternoon.
Those visa frauds wont be seeing a penny of my money, and I hope there are class action lawsuits heading their way as fast as possible.
How unprofessional and idiotic, of both Epass and Visa.
Scammers.
I am so stressed now. This really sucks! Bills and rent to pay:(
Mallick is a sleaze…….
The logical thing would be for Visa to give them notice and transition the users to another bank’s Visa card. The only explanation I can think of is that there was a high percentage of cards issued to stolen identities and that Visa was concerned there would be a surge in fraudulent charges before the accounts were terminated.
Ok I have seen epassportes excuses, but does anyone know if Visa has actually given an explanation? I can’t wrap my mind around the fact that they did not give us a proper notice about this, so wecan make a decision of taking our money of our accounts. I have searched and havn’t found any explanation from Visa
From what I can see for the moment, the only one at fault at the present time is Visa.
What, Epassporte has been used by scammers to manage their income ? Hey, there ARE for sure scammers in your town, and they are using the local banks… and the local towns aren’t revoked by Visa, are they ?
On the other hand, you’ve got Visa, a giant among the giants, cutting the line without any preliminary warning, and letting people unable to access their money.
Perhaps a handful of scammers will have their accounts frozen.
But heck, what of all the other regular persons whose income will be frozen too, and will find them unable to pay for food, for oil, for rent, until the hypothetical date the whole mess is cleared ?
I tell you, dear readers, I am FURIOUS against Visa for the shocking move showing deep scorn for the consumers.
Stop whining. If you were smart you would withdraw right away.
Its a card system designed to hide identity in many ways used by shady industries and cleared through dubious banks.Suprised????? Not really!!!
Card holders can’t hide their identity because they must enter his government issued ID number, name, address (to receive the card), phone.
This must be the BK blog with the most disliked comments ever. I think Visa is on to something :).
I was a software engineer working in a company which had a similar thing done to it by MasterCard (MC from here on). The circumstances may be similar or vastly different, but the program which triggered it was used mainly by online gambling services, and we provided customers with Maestro/Cirrus branded MCs.
The product was ostensibly a prepaid debit card for travellers. The melt-down started when an MC official at an international event received marketing material for the card, and called the help-desk. He was told all about the benefits of the card, including the ‘special’ benefits like being able to load gambling winnings onto it and then withdraw them as cash from US ATMs (I should stress that this was a program operated by our client, not by us; we were just the platform.)
It turns out that this is money-laundering. You just aren’t allowed to market that. So our client (who operated the program) was investigated, and then we (who owned the payment platform) were also investigated. While a handful of people were using the program legitimately, the vast majority were using it for its ‘special’ benefits. MC also found that we should have known about it, and we’d failed to due correct due diligence. The program was shut down immediately, and all cards were de-activated, as its primary purpose was to facilitate money-laundering (we received two hours’ warning, and I had a federal police officer standing behind me while I signed in and deactivated the card range). We lost our licence to access the MC network, and MC gave us 30 days to notify customers of legitimate programs and disconnect. We were successful in getting a court order extending this to 180 days.
MC has strict risk guidelines on this sort of thing. The integrity of the network is paramount: illegal money flows are targeted and stamped out vehemently. They would rather risk disconnecting thousands of legitimate cards than risk losing trust in a network which provides for billions of them.
The real problem is that it’s all private enterprise. Our contract with MC gave them all of these powers: if you don’t want to let MC have this sort of power over you, you don’t use their network. There is no right of appeal, especially for international partners (the court’s authority to even grant the time extension for our genuine legal programs was tenuous, and was only enforceable due to MC wanting to be nice to another party in the chain who was subject to Australian law).
I hope this is interesting information. If you want to know the story ends, join the club: it’s still going. Perhaps you can visit David Tzvetkoff in a US prison and ask him if he knows.
Everyone is immediately jumping on VISA. Don’t know if it’s valid or not, but comment on another site forum claims they called VISA International about their ePassporte account notification and claims was told that nothing has been cut off by VISA International.
Same post claimed they also called St. Kitts Nevis Anguilla National Bank and was told to call ePassporte because there was nothing the bank could do.
Just adding this information because as of right now, I don’t know who or what to believe, and there are conflicting stories floating around.
I understand the uproar because I have a friend who is also caught in this funds tie-up. Wishing all you accountholders well and hope you can access your funds soon.
isn’t there any other methods to get paid from them except, taking money from ATMs? Can we tell epassporte to send all of our money to our bank accounts VIA wire Transfer? Can’t we do this kind of things, i have about thousand of dollars in my epassporte account, is it really safe there? what should i do?
(Sorry, new to this forum and posted comment before direct reply)
Reply to Jahangeer: This is my understanding… If your money is in ePassporte eWallet account, US account holders can transfer to their US bank checking account directly. ePassporte account holders outside the US can pay $50.00USD for a wire transfer to move their eWallet funds to a US bank checking account. As of this writing, it appears any money in any other ePassporte account (virtual account VISA, etc.) is not accessible and cannot even be transferred to the eWallet account until ePassporte figures out a way to replace the arrangement they had with St. Kitts Nevis Anguilla National Bank, which ePassporte relied on to handle the financial arrangements, including VISA cards which allowed ATM withdrawals and point of sale purchases.
I can feel everyones pain! Yes, I am ready for a class action suit! How can they just keep peoples money? Luckily, I only have $13 in there at this time. Epassporte said that there is an option where you can transfer your money from going straight in your visa card, and put it where instead it will go in your wallet, and then you can transfer it to your bank account. Trouble is, when I tried to do that, the site said it was temperaraly out of service. I’m getting paid on the 6th, so I went to the site I work for and had them wire me the money to my bank account. But who knows how long that will take. I just hope I dont bounce a check when I am waiting. This situation has really hurt my finances. i would like to know why, and does it have any thing to do with adult sites,really?
i have ordered a epassporte visa card in june and still havent arrives. at the beginning I payed 50 usd for the card and mailing. in august i have seen the card havent arrived and I payed again 120 usd for a new one sent by FedEx, still havent arrived and now this problem. i am staying with over 1,000 usd in my epassporte account wich i cant transfer and no one’s giving an explanation. bloody hell, in a few days i have to pay my freakin rent and bills. when do u think we will get e better explanation of this sit’ ?
Reply to Jahangeer: This is my understanding… If your money is in ePassporte eWallet account, US account holders can transfer to their US bank checking account directly. ePassporte account holders outside the US can pay $50.00USD for a wire transfer to move their eWallet funds to a US bank checking account. As of this writing, it appears any money in any other ePassporte account (virtual account VISA, etc.) is not accessible and cannot even be transferred to the eWallet account until ePassporte figures out a way to replace the arrangement they had with St. Kitts Nevis Anguilla National Bank, which ePassporte relied on to handle the financial arrangements, including VISA cards which allowed ATM withdrawals and point of sale purchases.
Nice coverage Krebs but you’ve missed a couple of major items.
Epassporte isn’t only used by webmasters of porn. Families, military, police, senior citizens all use Epassporte as well. It’s due to convenience. However, this sudden cut off leaves these people in a serious mess. Many are stuck overseas with no funding or at college with no access to their money. Some old timers can’t get their medication or pay rent or what have you.
So we need to stop pushing the adult webmaster angle and just look at the customer being shafted angle.
Responsibility for what has happened has been shifted between all three entities. The reason for this is because someone screwed up and whomever is responsible is looking at some major lawsuits. If VISA pulled the plug without just cause and outside of lawful procedure or if St. Kitts or Epassporte did it and missed one iota of supportive data then any lawyer in his or her right mind would pounce on them and have a feeding frenzy.
Criminal or civil charges, if this shut down isn’t lawful, is due to some negligence and or incompetence someone’s butt is sure to be had.
I just save 50% ($130.00) by preordering some books to review the CPA exam from Amazon using my VISA electron card. They will be trying to take the funds soon! If I end up having to pay full price for these books after going through all this trouble I will definitly be interested in a class action suit Karen. I also have a friend stuck in a foriegn country who is paying for everything via epassporte. If he ever makes it home I bet he will be also. By freezing our personal funds with no notice and or reason someone is commiting a crime known as THEFT! I pay my taxes on all income paid to my epassporte account. There is no requirement to do this in advance. By indescriminatly barring me access to my money because it is POSSIBLE to launder money using these facilities someone is restricting my rights without a trial. If there are damages they should be subject to reparation PLUS PUNITIVE penalties!
Responding to “Bud” who is in trouble with his educational situation and CPA exam and friend overseas, yes, there’s no telling how many people are screwed and in major health trouble. Some folks are overseas visiting wounded military and are using Epassporte options and are now screwed. Some folks can’t get home for the Labor Day weekend. It’s going to be a tsunami of lawsuits for sure against all three companies associated just to find out who or what is responsible for this mix up.
Thanks to the previous posters who clarified that regular people use ePassporte as well – not just adult webmasters and gamblers. I am an ex-pat living overseas and have used ePassporte for several years simply because the ATM withdrawal fees are considerably less than what my U.S. bank charges.
So far there seems to be a lot of speculation, but few hard facts. What concerns me is the continued silence from ePassporte and Christopher Mallick since the initial notification. The more time that passes without any further comment, the more worried I become. ePassporte can’t be oblivious to the fact that their continued silence is causing tensions to rise by the hour.
Even if ePassporte managed to return everything to normal right now, I suspect that a large percentage of account holders would immediately attempt to withdrawal every penny in their accounts. Would they be able to survive such a mass withdrawal? If they are able to restore account functionality, they may have to impose withdrawal limits for a period of time while they attempt to restore their credibility.
I’m sure they know that credibility is severely damaged no matter where they ultimately lay the blame. They are hopefully scrambling to correct this problem and also trying to implement plans to survive the financial burden this will cause and restore customer confidence. I doubt Mr. Mallick is going to just clean out his desk and abandon what has been a hugely profitable business.
I don’t have the means or the connections to get any real answers concerning the situation or what may happen. Are there any readers who can? Do any of you have friends who may be financial or tax lawyers? Even a good CPA might have information that would help us understand our legal rights and what we can expect, worse-case or best-case? I for one would greatly appreciate any sound advice or useful comments from an expert along these lines. Thanks and I’m hoping for a positive resolution for all of us…
This tidbit on Chris Mallick is from http://www.mahalo.com:
“J. Christopher Malick is from Texas, and he has a checkered career in business. One company that handled accounts receivable for health services, went bankrupt; another was embroiled in a suit with MasterCard over costs associated with billing of pornographic sites.”
Perhaps he has mismanaged the funds in ePassporte and it is now catching up with him? Could happen.
Jerry, do you still “… doubt Mr. Mallick is going to just clean out his desk and abandon what has been a hugely profitable business”? He’s got the profits, but maybe at the expense of the health of the business.
Rob, I am not the least bit surprised about Mr Mallick. I read another story about how he denied an epassporte account for a site owner who had his girlfriends pics on the site. His girlfriend signed model release forms so it was legal. I guess he decided not to issue the epass account on grounds of being jealous.
What I am pissed off about right now is the fact that it is day 4 of me not being able to access money that took me 2 weeks and 83 hours to make. No answers nothing. Mallick does not even have enough decency to not be a coward and give us more answers. I am sure Mallick knew about this way before it happened, and was scrambling to come up with asolution before the rug got pulled out.
In the months leading up to this suspension, Epassporte was asking account holders to resend identification and utility bills as proof of identity and all that crap, in order to gain access to our accounts. They were claiming some of us had too large amounts of money in our accounts. Well I work for legitimate companies, and download turbo tax every year to pay my taxes. I am furious that I can’t at least get a non shady answer.
Honestly I’m tired of waiting for my money, and I am going to start looking into a lawsuit by next week. This shit is pissing me off.
Yes, I still doubt it.
I don’t understand why VISA International acted so strongly and broadly without warning; it’ll be interesting to hear the background and reasons.
Probably they have a good teacher? FTC killed entire hosting with tens of thousands clients – why VISA cannot do the same?
We have money locked down in epassporte and cant access these funds. Imagine having over $250000 locked down?
http://www.youtube.com/watch?v=oRyoq_pzm50
I have 2k locked up…….will we ever get it or will it be just taken off us.Should we make copies of our online statements to prove our funds….incase they shut site down.Who is earning money from this suspension?
The epassporte problem has been resolved , i just withdraw 250$ from my epass visa electron card
I hope your not lying
I have 4k locked up. Don’t know what to do now. I’m stuck, and done. I have bills to pay, loans.
C’mon MR. Mallick fix it fast for god’s sake.
Christopher Mallick, how dare you stay mute like a cowardly bastard? Who do you think you are to go this long without a REAL explanation as to what is going on. Thanks to your unruly business practices I had to borrow $1200 to pay my bills, and I NEVER borrow money! Do you not have any decency in your wasted soul? The worse has already happened to 10’s of 1000’s of us..WE DON’T HAVE OUR MONEY! So stop being a douchbag and post SOMETHING TRUTHFUL about any new developments. You know good and damn well what’s going on you spineless swine!!! Wether it’s directly your fauly or not is of no concern of mine. What bothers me is the lack of information being received in this case. No way in hell did Visa just pull out without warning you first and you effing know it! You are disgusting for not giving us a warning you bastard!
I am using epassporte from 2006, and i never had any problem regarding anything from epassporte, that’s why i am saving money to my epassporte since 2006 to yet…..i have saved $13k to my epassporte from 2006 for buying my own home for my mother…….what should i do now? please suggest me and guide all of us about any new update…you people got, if we can only take $500 a day from ATM, so we have to ask epassporte and VISA to allow us atleast 2 months to take all our money out from our card, or epassporte has to set a deal with Mastercard like payoneer did, with complete confirmation by Money laundering policy and system.
Perhaps it is because I do not have funds in ePassporte, and never knew it existed until Brian made the reference here. My concern is why would a prudent person (s) trust a service as this? I do not place my real charge card number on line or over the telephone. I use a randomly generated matrix by my card server that is good for a specific vendor for a set amount. What would happen to all the funds if ePassporte declared bankruptcy or just disappeared?
well to begain with you should of went into your epass account to raise your withdrew limit . after doing that you had 3 hours to withdraw the limit raised to or transfer it to a bank account . after those 3 hours you limit goes back to the amount set on your account .If you were saving that much money you really did not think it out clearly .Im sorry to be harsh about this but thats no way to save money in an account that deals with gambeling and adult bizz
Is there any news about ePassporte vs Visa? In an interview Christopher Mallick said it would be solved after the weekend – I didn’t see any news whatsoever about the status. I hope someone knows anything about it.