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Porn sites which rip off sex-surfers are to be handed an ultimatum by credit card groups - clean up or cough up.

No, not their material. Online sleaze operators must fix their fraud record or face monthly fines of $5,000.

Europay International, which is owned by 9,000 British and continental banks and acts for Mastercard in the UK, says the move is a response to high levels of customer complaints.

The porn industry has a higher level of credit card fraud than any other Internet sector, according to Paul Lucraft, Europay deputy general manager UK and Ireland.

"There are a lot of problems with these merchants. Some of them are trading in a dodgy fashion, and there are a lot of unethical types of business," he said.

One prolific activity involves porn meisters asking users for credit card details to check proof of age. They claim the information will not be used, then go ahead and make charges on the cards. Worse still, these hapless voyeurs also often find themselves locked into long-term contracts.

Another escapade involves a credit card number being copied through a completely different transaction or source. The details are then used on the porn site - with some people too embarrassed to complain due to the XXX name on their statement.

"We want it stopped because it's bad trading. And it has ill-effects on genuine sites," Lucraft added.

The Excessive Merchant Fraud Programme started in April, and primarily offered sites a few months' grace period. Now the system is starting to kick in.

Sites are fined $25 if they are above the two per cent fraud cut-off for one month and $5,000 if they breach the limits for two or more consecutive months.

But customers won't get this cash - it is likely to go towards compensating banks which fork out to cover stolen credit card details.

Meanwhile, VISA is reported to be fining porn operators up to $100,000 a month if fraud hits seven per cent on sites.

Worldwide average credit card fraud is believed to be 0.16 per cent, according to Europay. Online fraud is considerably higher at around four per cent. Total credit card fraud costs Britain £189 million - with the Neb accounting for £7 million. ®

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