Sezzle Removes Merchants Following The Bear Cave’s Investigation
Sezzle recently cut ties with several illegal online pharmacy merchants following an investigation from The Bear Cave.
On January 2, The Bear Cave highlighted that Sezzle was the exclusive credit card payment processor for PharmStore, an online Canadian pharmacy on the National Association of Boards of Pharmacy’s “Not Recommended List.” LegitScript, an Oregon-based payments compliance company that works with the FDA, defines PharmStore as “a rogue pharmacy website.”
On or around Saturday, January 18, PharmStore removed Sezzle as a payment option. A customer service representative for PharmStore told The Bear Cave their contract with Sezzle was recently canceled, and they have no plans to restore the payment option.
Below are screenshots showing the PharmStore checkout page with Sezzle on January 2 and without Sezzle on January 20.
Canadian online pharmacies selling to U.S. citizens are “almost always unlawful because the FDA cannot ensure the safety and effectiveness of foreign prescription drugs.” Many of these pharmacies “sell drugs obtained from countries other than Canada which lack adequate pharmacy regulations.”
For example, PharmStore was selling the antidepressant Prozac with the disclaimer: “Product of Turkey. Shipped from Mauritius.”
Over the weekend, Canada Drugs Direct also removed Sezzle as a payment option. Like PharmStore, Canada Drugs Direct used Sezzle for all credit card payments and, without Sezzle, could no longer accept credit cards.
Below are screenshots showing the Canada Drugs Direct checkout page with Sezzle on January 2 and without Sezzle on January 20.
Canada Drugs Direct was also on the National Association of Boards of Pharmacy’s “Not Recommended List” and was called “an unapproved pharmacy website” by LegitScript.
Some U.S. consumers had complained about receiving abnormal medication from Canada Drugs Direct:
“The generic pills do NOT look anything like the generic pills in the US. The pills came from some foreign Asian county.” (March 2024)
“I ordered a generic version of the drug Livalo, which was made in India. It gave me really bad side effects that I wasn’t getting from the name brand Livalo…” (May 2022)
“I ordered two Trelegy for Inhalation and noticed after trying the 1st one there was an issue. I checked the expiration date and found that even though it was not an expired product, it did expire a full year sooner than anything I had purchased in the USA. I also found it was shipped from India by way of Singapore.” (December 2023)
Drugmart, an online Canadian prescription referral service, also promoted Sezzle as a payment option on its homepage. Drugmart was on the National Association of Boards of Pharmacy’s “Not Recommend List” and categorized by LegitScript as “a rogue pharmacy website.” LegitScript gives that label when a website’s “sale, prescribing or dispensing of prescription or other drugs reasonably appears to intentionally or knowingly violate… the laws and regulations where the drugs are dispensed from or where they are offered to be shipped to.”
Around 11am ET on January 18, Drugmart deleted its dedicated homepage tab about Sezzle, according to data from Visualping.
Planet Drugs Direct, another prominent online Canadian pharmacy serving U.S. citizens, also no longer lists Sezzle as a payment option. The National Association of Boards of Pharmacy has Planet Drugs Direct on its “Not Recommended List” and LegitScript calls the company “a rogue pharmacy website.”
Likewise, CanPharm also removed Sezzle as a payment option. Sezzle was the exclusive credit card payment processor for CanPharm, which is also on the National Association of Boards of Pharmacy’s “Not Recommended List.”
In addition, Sezzle stopped payment processing for the other unauthorized online pharmacies identified by The Bear Cave, such as Your Canada Drug Store, CanadaPharmacy, and TotalCareMart — all of which are on the National Association of Boards of Pharmacy’s “Not Recommended List.” TotalCareMart still features a “Pay Later with Sezzle” tab on its homepage, even though the actual payment option is disabled.
The Bear Cave previously noted these unauthorized online pharmacies are large profitable businesses that likely paid Sezzle well over the standard 6% merchant fee in order to accept credit card payments.
The Bear Cave wrote about the significant societal costs of enabling these illegal online pharmacies:
“History shows serving illegal online Canadian pharmacies can be very profitable and come with steep regulatory penalties.
In 2011, Google paid $500 million to settle allegations that it ‘accepted advertisements from online Canadian pharmacies that targeted U.S. consumers and illegally imported controlled and non-controlled prescription drugs into the United States.’ Below are relevant quotes from the Department of Justice press release, with emphasis added by The Bear Cave:
‘The importation of prescription drugs to consumers in the United States is almost always unlawful because the FDA cannot ensure the safety and effectiveness of foreign prescription drugs that are not FDA-approved because the drugs may not meet FDA’s labeling requirements; may not have been manufactured, stored and distributed under proper conditions; and may not have been dispensed in accordance with a valid prescription.’
‘The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers.’”
A 2023 study titled ‘Assessing the Impact of Illegal Online Pharmacies in the U.S.’ estimated that ‘12.6% of total adverse events could have been avoided if all drugs purchased from illegal online pharmacies had instead been purchased from legal pharmacies’ and found these adverse events represented about $11 billion a year in additional costs for the U.S. healthcare system.
Without credit card processing enabled by Sezzle, these unauthorized online pharmacies will lose much of their reach to American consumers.
By shining a light on these practices, The Bear Cave and its readership have reduced the fraud, waste, abuse, and adverse events caused by these illegal online pharmacies.
Good investigative work Edwin.
I was looking into SEZL late last year as it came up on my stock screener. Two days after that, Hindenburg came out with his short report (Dec 18), making my life easier :)
The effect of your work is measurable...and needed. Thank you, Edwin.