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While online merchants themselves have to foot the bill for phony charges, American Express has to pay administrators to process the disputes. Fraud accounts for some disputes; many porn sites bill by using business names that are different from the website name; and many porn surfers deny they've made the charges when confronted by a spouse – something pornographers refer to as the "gak factor." (Husbands run up a credit card bill at a smut site, then go "gak" when their wives see the monthly statement).
All those disputes adds up to big money hole, Amex's Fisher said.
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