Wow... just wow
1. Do 99% of the adult affiliate programs allow this kind of marketing?
- Yes
2. Do the terms state that this kind of markting is not accepted?
- No
3. Could Shoehorn know that this kind of marketing is not accepted?
- No (see 1.)
IMHO the only correct way to handle this would have been to tell him that you don't want these sales, pay him for the sales he generated, update your terms and let all your affiliates know that you won't allow this kind of marketing anymore. To just stop paying without letting him know is not a good way of doing business at all. I can understand this if somebody is carding or something similar but not in this case.
I really wonder what's next...