With audiotext and Internet credit chargebacks amounting to some $25 million a year, by several estimates, you might think that collections would be a valuable piece of cyberturf turf, particularly in the adult online world. And you might wonder why more haven't staked a plot on that turf. But for the time being, only Rick Cohen of Fraud Action Network Services (FANS) is working the turf - and quite comfortably.
"In the last seven years, there's been maybe one or two competitors, but they've faded out of the industry," Cohen says amidst the din of ia2000. "We dedicate ourselves strictly to the adult entertainment industry."
Cohen is no stranger to financial collections - he's been involved in the business most of his life. In fact, he has a somewhat intriguing pedigree: he is the grandson of mob legend Mickey Cohen, one of the founding fathers of Las Vegas, though Cohen is not exactly playing the field as his grandfather did.
And he's taken on something of a challenge by concentrating on the adult Web. Who are some of his prime adult entertainment clients? Cohen won't mention them by name, citing their own image concerns, "and a lot of them, with their own other contracts, those contracts assume there should be no collection." He'll say only that his clients include some of the biggest names in adult entertainment - including some adult stars "who don't get paid and we help them get their money."
He says it's very difficult to catch up to adult entertainment debtors because, often as not, when his firm catches up to such an individual, he or she does not like to admit that they've been indulging adult Web material.
"What happens is, once you get together on the telephone, if you're able to, first they're going to go ahead and tell you, 'you don't know what you're talking about'," Cohen says. "But with the information that we have, as far as time and date of the call and all the tracking that's involved in these type of calls, you've pretty much got them up against the wall. So a big majority of them are willing to finally go ahead and send in restitution."
Aside from $25 million in chargebacks a year now, Cohen believes it could get worse before it gets better, especially with the Internet side, which he thinks could double over the next few years.
And other kinds of fraud plague the business as well. "When it comes to using the phone lines and paying for adult entertainment," he says, "a lot of times you'll find that the phone number that you get...may not be the same name that was used on the credit card."
How else can a company such as FANS cut down on fraud? Cohen says stronger fraud prosecutions can help, especially in cases involving credit card theft. He estimates such credit card fraud involving adult entertainment is running in the millions and climbing.
And he says the adult Web business is going to tighten verification up in the next five years, too. He thinks they'll be calling for a little more customer information than they do now, including and especially Social Security numbers, although he's mindful of certain implications involving potential privacy issues - like information being bought, sold, or traded without their permission, as often runs rampant in the brick-and-mortar world.
"But I'm a firm believer that, if people want to use it that much, they'd be willing to give up the information that it takes," he says. He says information-trading behind customers' backs is not good but, for now, is difficult to cut down.
Cohen would also like to see his company make an agreement in Washington for some government work involving fraud prevention. "It's a slow road," he says, "but we're going up it."
