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Canada must end financial discrimination against sex workers
Financial institutions decline sex workers’ applications for personal or business bank accounts, credit or financing services. (File Photo: charlesdeluvio/Unsplash)
In February 2024, Keily Blair, CEO of OnlyFans, revealed that a bank did not want her to open a personal bank account with it, seemingly because of her work.
OnlyFans is a subscription-based platform founded in 2016 and based in the United Kingdom. It allows sex workers, celebrities and ordinary people to sell access to images, videos and messages, including sexually explicit content. Blair garnered headlines for her banking problem, but others have not been so fortunate.
For years, banks, payment providers such as PayPal and credit-card networks in Canada, the United States, Australia and the United Kingdom have financially discriminated against people working in the sex and adult entertainment industries, including those offering sexual services and sexual content online, by cancelling or blocking access to their services.
As a researcher who studies how payment providers set and enforce rules for their customers, I’ve written about how these companies have a pattern of denying financial services to people and businesses involved in selling sexual services and content, even where those activities are legal.
Financial institutions say they do this for several reasons.
First, it’s a high-risk sector for the institutions – similar, they argue, to digital currency exchanges and gun shops.
Second, financial institutions say they are often unable to distinguish between customers who are consenting adult performers and those caught in sex trafficking, a slippage that law enforcement also often makes.
The result is serious harm to sex workers’ autonomy, livelihood and even physical safety.
The federal government should work with financial institutions and sex-worker associations to find ways to identify legitimate adult performers; remove the “high risk” label; develop clear guidelines for dealing with applications; recognize that a diversity of means of payment is used in the industry; and enforce clear rules against revealing performers’ personal data, including their real identities.
Financial institutions present many barriers
That a CEO of a large business – OnlyFans generated revenue of US$2.5 billion in 2022 – had a problem accessing banking services should raise alarms about widespread financial discrimination against people working in the sex and adult entertainment industries.
Financial institutions decline sex workers’ applications for personal or business bank accounts, credit or financing services. They refuse payment-processing services; close accounts without notice; and freeze or confiscate funds, the Scarlet Alliance, Australia’s sex-workers’ association, reports.
A 2023 survey by the U.S. Free Speech Coalition of individuals working in the adult-entertainment industry found half of respondents said financial discrimination was their biggest challenge – 63 per cent had lost a bank account or payment provider while 50 per cent had been denied a loan and 39 per cent had lost access to a credit-card network.
The issue is not limited to those who are currently working in the sex industry. Banks have cancelled accounts of people who have long left the industry, with funds from customers sometimes frozen.
Canadians in the sex-work industry across the country and online have reported losing bank accounts or being denied payment processing or business accounts.
In Vancouver, for example, a sex worker reported that a local credit union refused her a business bank account after she disclosed her profession.
Canadian adult content creators on OnlyFans also report losing their financial services as major banks reportedly closed accounts after they received information that the clients were involved in creating sexual content online.
Privacy and physical safety at risk
Debanking policies, also known as “derisking,“ or the routine denial of financial services to an entire industry because of a perception of the industry’s high-risk nature, can also entangle the targeted sex workers’ family members.
In Australia, one institution decided to debank not only the licensed owner of a legal brothel but also his entire family, who were uninvolved in the sex industry. The bank penalized the brothel owner with a lifetime ban.
Financial discrimination can also threaten the privacy and physical safety of those in the sex industry. Sex workers in Australia and the United States report banks and payment providers improperly and perhaps unlawfully have disclosed their personal information, including performers’ legal names.
As the Scarlet Alliance notes, these information breaches can put adult performers and creators at risk of stalkers, abusive fans or other bad actors. Financial exclusion disproportionately affects women and racialized sex workers as well as LGBTQI+ performers and creators.
A key part of the problem is how financial institutions categorize the sex industry as higher risk similar to other high-risk categories such as digital currency exchanges and gun shops. Equally problematic, financial institutions and government agencies can erroneously conflate sex trafficking with legitimate sex workers.
Some of FinTRAC’s indicators of sex trafficking – frequent payments in multiples of small amounts and use of bitcoin or other virtual currencies – apply equally to sex work. Banks are likely inaccurately applying these indicators to deny financial services to or flag accounts of sex workers.
Australia provides examples of some important steps to address these issues. While Australian sex-work associations argue that Australian banks have much further to go in addressing financial discrimination, the Australian Banking Association is moving ahead on some recommendations from 2022 relating to sex work and small businesses.
The Scarlet Alliance submitted recommendations in 2023 to AUSTRAC, Australia’s banking regulator, as part of its consultations for improving how financial institutions treat customers they deem to be higher risk.
What Canada can do
Given these challenges and the Australian experience, Canada can take the following steps to address financial discrimination against sex workers and co-ordinate guidance for financial institutions.
First, FinTRAC, law enforcement and financial institutions must clearly differentiate sex trafficking from sex work and establish clear processes that enable financial institutions to provide financial services to sex workers.
Second, regulators, financial institutions and payment tools such as Apple Pay and Venmo must fundamentally reconsider the classification of sex work as higher risk. Instead, financial institutions should undertake a customer-specific approach to risk similar to Australia’s that is tailored and involves a reasonable understanding of the customer.
This entails, in the recommendation of the Scarlet Alliance, a “good-faith assessment and understanding of the risks posed by individual customers” as well as the institutions’ statutory obligations, such as anti-discrimination legislation.
Third, to counter financial institutions’ near-blanket bans of sex workers, the institutions should be provided with a clear set of guidelines on providing services to sex workers, including “guidance on appropriate responses to sex worker customers in situations where a decision to decline or discontinue services is made.”
Guidelines should include appropriate notice before suspending any services, clear policies for appeal and clear reasons for decisions to deny or discontinue services.
Fourth, the regulator’s guidance to financial institutions should recognize that a “diversity of modes of transaction” is a normal part of trade for sex workers.
This means recognizing that sex workers’ income can fluctuate significantly due to work shifts, market trends and other factors, and that workers may receive funds through different financial tools, such as Venmo, Apple Pay, direct deposit or Patreon.
Fifth, recognizing that many sex workers have reported that financial institutions have breached their personal information, especially revealing their legal names to third parties, financial institutions must take more seriously their legal obligation to safeguard all clients’ personal data.
Finally, there should be ongoing, meaningful collaboration with sex-worker associations such as the Canadian Alliance of Sex Work Law Reform to create additional guidelines for financial institutions to provide services to sex workers in a non-discriminatory way and to ensure their financial autonomy, safety, data protection and privacy.
Financial institutions’ discrimination against sex work, even where it is entirely legal, can cost individuals their livelihoods and autonomy. The loss of services can push people into riskier work and less stable payment practices such as cryptocurrencies.
On this issue of human rights, Canada needs to take action.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
