Since May 1, American Express has been rolling out a new policy: It will no longer cover transactions from adult Web sites. American Express spokeswoman Joanne Fisher said the credit card company has just begun the process of notifying their merchant clients of the decision.

"The decision was ... based on about a year's worth of work we've done with this industry," Fisher said. "There was an unacceptably high level of customer disputes. We worked with the industry, but the challenges remained, and we just decided it was no longer profitable or practical to work with this industry."

'Some of the Web masters are really upset. They feel they're going to lose a significant amount of money'|Tom Fisher, CCBill Tom Fisher, general manager for credit card processing firm CCBill, said he had received a notice from AMEX earlier this week notifying them of the new policy.

He said American Express accounts for a small percentage of his business, but "certainly any loss of business has an impact on any of the Internet companies. "I understand some of the Web masters are really upset. They feel they're going to lose a significant amount of money," he said.

Disputed charges

Disputed charges are common both online and offline, but some have argued that they occur more frequently with adult Web sites.

For instance, a parent may dispute a charge rung up by a teen who was not supposed to have access to the card. Other problems occur when the user who actually went to the site is faced with, and embarrassed by, his or her bill.

Fisher said his company has not noticed any excessive problems with adult sites, however.

"American Express has chosen to deal with the industry in total rather than on an individual basis," he said. Officials for Visa and MasterCard could not reached for comment.