NEW YORK - Pure Vanilla, an anonymous-payment service provider, has announced that it will not accept new clients or process re-bills using credit cards while it investigates violations of its merchant agreement.
On Aug. 29, the company discovered that several clients used their Pure Vanilla accounts in a way that violated the merchant agreement and posted the company's operating procedures. Pure Vanilla is investigating each registered merchant and site in an effort to track down the violators. A letter notifying clients of Pure Vanilla's actions was sent on Aug. 31.
"It's a serious matter, so we are conducting an investigation here that we are hoping will come to an end very soon," said Vice President of Marketing Kathy Kennedy. "We have a positive outlook on the situation, and we believe it will be corrected. We want to protect our current merchants and customers. Rather than risk any of our other merchants being tainted with this, we have put a freeze on everything completely. It would be pointless for us to sign any new merchants up because then they would be lumped together with those being investigated."
The incident also led to the departure of Vice President of Sales Kevin Blatt, who left the company after the merchant-agreement violations were reported. He said, without elaborating, that more than one violation occurred.
"All I can say is that it's a situation where it wasn't just one merchant," he told AVN Online. "It's unfortunate. It happens to a lot of people in this business, but we have a different type of business model, so banks look at us a little more carefully than an average pay site. It's usually a high-risk venture for a lot of these banks. So if there is any cause for an investigation and it sheds a light on something, it leads to other things happening and more questions being asked. ... But I think [Pure Vanilla] will make it and pull through and be OK eventually."
Blatt said he realized it was time to move on after considering the potential effect of rumors about Pure Vanilla's status.
"I really wanted this whole situation to correct itself fast," he said. "But when you are down for a little while, it becomes a situation where, even if it's three or four days, people start asking questions. ... If a rumor starts saying that they are shut down, it's hard to stop that rumor."
Client JMM of Octogy Media Partners LLC said he received the notice from Pure Vanilla on Aug. 30.
"My Pure Vanilla sales have dropped to zero with no joins and no re-bills," he told AVN Online. "It has not affected my overall sales because we have always offered another company that also offers anonymous processing, so my Pure Vanilla sales have shifted to there."
JMM added that he is sticking with Pure Vanilla "for another week or so."
"I am disappointed, yet we have not pulled out," he said. "We will hold on until they make an announcement one way or another. Hopefully, they get it straightened out, because I really like their program."
While Pure Vanilla's investigation continues, merchants using the service can still conduct transactions through their bank accounts, e-check or ACH.
