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Fraud chargeback filing help



7:41 pm on May 6, 2009 (gmt 0)

5+ Year Member

We have a "customer" that has filed several chargebacks with us. We have a small start up that provides stored value cards, mobile payments, etc.

The situation is frustrating to know end. We KNOW this person is fraudulently filing a chargeback.

Scheme: Customer has his live in GF sign up for an account with us. They fund the account with his credit card and then use our pre paid debit card to make transactions. Including the payment of his annual car registration, parts for his car, Time Warner Cable bill and Netflix.

In the affadavit the customer states "neither I, nor any authorized user received any benefit or value from these charges.

Clearly he did, as we proved he registered his car with the DMV in NY state.

Our merchant bank is telling us, sorry if you don't have delivery confirmation there is nothing we can do. We do have CVV2 and AVS matches.

I am fairly certain I share this frustration with others. If someone wrongfully used his card, fine we owe it to make him whole. But when we can see the transaction information through our processor and see that he did these transactions is it frustrating.

Surely there is some sort of remedy for merchants in this situation. Please help :)




8:39 pm on May 6, 2009 (gmt 0)

10+ Year Member

How about court or collections since the merchant bank won't help? I'd say you'd have a good case in court since he registered his vehicle on your card. That was really dumb.


8:52 pm on May 6, 2009 (gmt 0)

5+ Year Member

LOL yeah you are so right about the really dumb part, that is what we thought. Right now though I am the one feeling dumb. :(

First of all thanks for taking a moment to pitch in. I appreciate your input.

We thought wow this is an open and shut case we provided tons of supporting documentation and celebrated, thinking there is NO WAY they will let this guy get it back.

Instead I get a snippy CSR from our bank saying with no delivery confirmation she can't help us. I understand that, in a typical scenario, and I do strongly feel customers should have recourse but this is just obvious fraud.

Thanks for your suggestion the unfortunate part is a court case on the opposite coast of the country will cost us more than the CB amount. Though I am thinking of authorizing that route just on principle. At some point you have to do what is right regardless of the cost.

I was hoping someone knew of a way or loophole to overcome the whole delivery confirmation issue by showing them it is a fraud claim. Right now our bank is not willing to look outside the box.

When I first joined the company about 9 months ago we were at 8-10% fraud loss (ouch) now we are at 30 basis points for CC and 20 BP for ACH so my program is working. I just can't stand the idea that this guy is doing this.

Thanks again...

Anyone else?


9:16 pm on May 6, 2009 (gmt 0)

WebmasterWorld Administrator lifeinasia is a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month

I'd say it's pretty much a lost cause with the credit card company at this point- they are overly biased towards card holders.

I'd contact the police (and perhaps a lawyer). If you can prove he lied on the signed affidavit (which it looks like you can), my guess is that he can be in a world of hurt and could face jail time. It may take some time and effort, but I would pursue it as far as you can.


9:39 pm on May 6, 2009 (gmt 0)

5+ Year Member

Your going to have to eat it. My processor told me that if I do not have a captured signature and/or ship to the billing address they will never be able to help against these types of charge backs.


9:49 pm on May 6, 2009 (gmt 0)

5+ Year Member

So going after them criminally or civil courts is the only recourse? It seems like the CC issuer would not want to 'back' someone that is obviously fraudlently filing fraud claims. Bad PR for the issuer.

I understand the points everyone is making and agree. I understand an issuers motives in protecting their bottom line but with the growth of ecommerce and the importance in the issuing banks bottom line that they'd update their processes to include evidence of fraud claims.

Thanks folks I really appreciate the help. If nothing else it led me to this forum. Even though I am asking a very basic question I have much experience in ecommerce fraud and helpd start one of the companies I see mentioned on nearly every page here, so far. In specific I started their fraud program and ran their criminal investigations group for 7 years.

So I hope I can be off assistance to others on the forum.




3:58 am on May 7, 2009 (gmt 0)

You have to play by the credit card companies rules to avoid chargebacks. This means getting a confirmation like they say.

If you can't or don't want to do it I'm not going to say the fraud is your fault, but you do have some responsibility for the outcome.

Learn to play by the rules, even if they don't seem fair.


4:26 pm on May 7, 2009 (gmt 0)

5+ Year Member

I understand the rules fully. But the, even if we all know this guy is committing fraud by filing these chargebacks we are going to over look it because you have no mechanism for delivery confirmation, is not beneficial to us or them. I understand it helps protect their bottomline and assists legit customers but...

If there is concrete proof that their customer is committing fraud then the situation should be addressed. If not they are willfully covering for that behavior. And rewarding it frankly.


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