Craigslist is working on long overdue step that will help curb some of the ads posted by prostitutes and other adult workers, caving into demands by attorneys general from 40 states to regulate its message board from illegal activity. The AGs of 40 states and Craigslist announced a joint settlement to this effect this afternoon.

The site will ask posters for a working phone number and pay a fee with a valid credit card, which means the company could have potentially earned a lot more money, even if the volume of posts (and hence the pageviews) go down. But this is Craigslist, which does not operate like a normal business: it will donate all the money generated from charging for these ads to charity. Also, the company says that businesses have sprung up selling software and other services designed to evade Craigslist’s terms of use, and to curb that, it will start sending “cease and desist” demands to them. It will also tighten and improve the site’s monitoring functionalities.

It has already started some measures: for instance, in its “erotic services” section, it is now requiring a working phone number for advertisers, and enables blacklisting of phone numbers for those who post inappropriate ads. Phone verification resulted in an 80 percent reduction in ad volume, and significantly increased compliance with site guidelines, it said.

More details in the joint AGs and Craigslist statement here.