Chargebacks? anyone ever win one?

[Fluffy]

Hi
Just had a chargeback - only my second ever but still so annoying.

We deal mail order, this one was taken over the phone, all relevant checks carried out, CVV and address verified, shes even SIGNED for the goods herself for which we have proof - the card company have still found in her favour as she has signed a declaration stating she had no involvement in the sale.

Has anyone any advice? Its only £135 but for a small business its enough.

Thanks !

[cjd]

You will never win with a chargeback - it's not in the bank's interest. Swallow it, move on and call it a cost of business - the on-line equivalent of 'shrinkage'.

You could attempt to pursue it as a civil action but it will cost you time and money.

It's an important topic tho' and I'd like to hear other experiences.

[Pilfo]

Take a trip to down to the delivery address and confront her!

[creacom]

Take a trip to down to the delivery address and confront her!

And risk having more than just a cash problem on your hands ?!

Not recommended mate, even if she lives just 1 mile away. Last thing you want is someone saying that you are aggresive, pushy or harassing her !

Swallow the loss and move on Im afraid.

Jacqui

[Fluffy]

Boy would I love to confront her - anyone live in Bristol?

For what its worth ive written a letter today threatening legals etc, although if your hard faced enough to carry out fraud cant imagine it'll have much impact.

[dan_moore]

Chargebacks are really, really annoying - the most annoying thing being that you can do absolutely nothing about them when they happen... As soon as the customer has told their card company that they had nothing to do with the transaction, you might as well burn the money because you won't be getting it back!

Dan

[Toon]

I have only ever had one chargeback so far (touch wood) for £270. I phoned the bank and told them I sent the goods to the address that the card was registered to. The banker said fine and gave me the money back. The card owner done another chargeback and I had to provide details on the order etc. Unfortunately I had lost the tracking number as it was about 7 months since the transaction took place so I lost out. I feel that f I had all of the relevant information including a signature from the courier company etc then I may have won the case.

[SillyJokes]

You could try reporting them to police for theft if you have proof they signed for it.

Somestimes they are not interested, but sometimes they are working on a case for that address and you can help bring the perpetrator to justice. We have done this once.

It's time there was a central register of dodgy customers/addresses.

[ibscom]

I am new to the ecommerce game am just launching an ecommerce website. Is there anything I can do to prevent things like the above happening or any other fraud?

For Skype and home office equipment.

www.ibscom.co.uk (http://www.ibscom.co.uk/)

[cjd]

Not easily without incurring extra costs and creating inconvenience for your customers.

Some obvious things.

Don't deliver overseas unless you get bank transfer or equivalent payment
Look carefully at every transaction to see how it 'smells', particularly first time customers.
Understand how your Payment Service Provider works and get to know its reports

[The Resolver]

Firstly the boring bit which I've said many times here but first thing to do is to ensure your website complies as to content with Consumer Protection (Distance Selling) Regulations 2000 and the Electronic Commerce (EC Directive) Regulations 2002. If not then in certain cases the buyer can demand his money back even though did receive it and the product was as described. As the public begin to learn about their rights chargebacks will increase. Also ensure your navigation content limits the opportunities for a business buyer to claim to be a consumer (to gain more rights to his money back.)and your terms and conditions do not make it easier for the mischievous,if not downright fraudulent, buyers.

Now as to this particular case there are career complainers some of whom slip into criminal activity. I don't agree that you should just "swallow the loss" .

If one company was able to gather the evidence and file a fraud complaint with the police this would send a big message to the public. For so long as everyone just swallows the loss,the fraudsters will continue. For years the insurers swallowed the loss of compensating personal injury fraudsters (encouraged by doctors who all too readily diagnosed whiplash) until they began filming claimants playing football without their golden collars etc Now the police regularly prosecute fradulent claimants

Lets do something about this together. Sillyjokes idea of a database is not so silly.A friend of mine runs a service whereby they identify serial returners/complainers to the High Street. I think what we here should set up is a database to which everyone contributes the contact details of everyone who has ever sought a chargeback from them. Contributors could then search if any complainer has sought a chargeback previously.Not itself evidence of fraud but a marker. For two producst from separate suppliesr to not show up in delivery to the same address suggests someone is not being totally truthful. (Now it could also mean a problem with the postal service but thats another matter) There are a load of legals here -principally privacy issues,but I can look after that. Participants will need to add some small print to their T&Cs,privacy statement.They must not have access probably to the earlier chargeback claim (but a third patry can offer up the fact of the previous claim to the bank and identify the bank reference of tghe earlier chargeback claim so the banks can liaise and report to the police )

If there is enough interest (PM me ) then we can discuss setting up a facility.

[DuaneJackson]

It's time there was a central register of dodgy customers/addresses.

That's an interesting suggestion. I'd have thought the DPA might cause a problem though? Or perhaps not if it's just the address that's recorded and "information that can lead to the identification of an individual" ?

It should be fairly straightforward to develop something like this and make it easy for shopping carts, etc to do an automated look up before processing the order.

If only I had more time on my hands!

[cjd]

If someone can convince me that the sharing of customer data in this way is legal and that the risk of being sued for defamation etc is zero, I'd be interested.

[DuaneJackson]

Where's Jonathon at Hands On Group when you need him???

[starsgazing]

Take a look at Fraud Call from Varilogix. COM (can't yet post urls).

Perhaps this may be helpful for you in future?

[The Resolver]

There are a number of these phone linked verification systems being launched. They don't verify anything except who has physical possession of the registered phone at that time but which may or may not at the time be in the hands of the rightful owner. So chargebacks would not necessarily be stopped in cases of people living in shared accommodation (eg student shares) or in dysfunctional family homes or in cases of a bag being taken with wallet and phone or where delivery was disputed as above in this thread etc etc etc.

As I said above I do not see a privacy issue that is not readily surmountable. Privacy is simply about consent to what you do with the info in what circumstances. There are no absolute bars. I have previously interviewed the Deputy Information Commissioner a few years back about the privacy issues relating to e-commerce ,for an article of mine - and am happy to do so again on this issue togain clearance if there are enough people here to form a team to create and run the database. I think there is a useful facility here if enough people get together to operate it. I will sort out the legals if someone else will sort out the technology and others the promotion.

[The Resolver]

.....and ,to answer cjd, there's no defamation risk as you are only logging an indisputable fact (that a chargeback claim was made) and for the purposes of the detection and prevention of crime. Does anyone know whether the banks check for prior claims to other traders when dealing with a chargeback? If they did they could not notify the trader during the claim process (this is where privacy kicks in more strongly) but, again, if customers agree to a term in an online purchase that the trader will inpt the fact of any claims to a traders database and be accessible by other traders with whom they may do online business, then this will amount to consent.

[SillyJokes]

I would have thought that along with CCTV, customers with nothing to hide would welcome this kind of protection.

However to a degree it goes against my strongly held belief that privacy is very very important.

It would cut online fraud to merchants I'm sure, but who would fund it? The banks? No, because already they let the merchants take the cost of online fraud, it will be down to the merchants again.

[cjd]

It would also need a realtime look up to be properly useful - notice after the the transaction is less useful. It wouldn't be difficult to do it it would not be cost free.

[adam]

Don't move on. Shops have signs saying "Shoplifters will be prosecuted" and from what you are saying this is what this person has done.

If you sent to the address on the card and the signature used to receive the goods matches the signature the bank has on file then someone has stolen from you, if not the customer it must be the bank.

[bitsnstuff]

Hi,

I have just won one - my first chargeback. I was very annoyed to say the least, but was told that the customer claimed she did not make the transaction and that it was fraudulent, so I called her. I very politely explained who I was and asked if she was happy with her bespoke purchase, she said that it was lovely, so I then asked why she had processed a chargeback. We sorted it out over the phone immediately and she was very apologetic and even offered to send a cheque!! It took WorldPay and her bank 2 months to get themselves in gear though!!

In my case, my limited company name came up on her bill, so she didn't recognise it, which is something I was aware would happen, however, that is the only name WorldPay will let me use.

Kate

[Early Warning]

To share personal data is possible to do as long as the purpose you do it fits in with the UK Data Protection Act.

Early Warning is a database of credit card fraudsters and charge back fraudsters which shares the data with all its customers. It does this legally under the provision in the DP act for the propose of the prevention and detection of crime. I would strongly advise anyone thinking of sharing data in a public way i.e forums or message boards to check out the DP act before they embark in this type of venture.

I spent a lot of man hours and money making sure that Early Warning was compliant.

[DuaneJackson]

Ahh, someones already doing it! Good to hear.

How are you marketting yourself? I've been involved with ecommere for quite a while and have never heard of you guys. Your prices seem quite steep. Do you provide a monthly subscription with up to x amount of checks as opposed to charging on a per check basis? 50p per check can be a big chunk of profits.

[Early Warning]

50p is for our report auction fraud service. our credit card fraud service starts at £5.00 per month plus vat.

We are just starting to advertise and have relied on word of mouth and pr.

We have been talked about a lot in the press.

[DuaneJackson]

Sorry, I couldn't have read the site properly :redface:

Good luck with it - it's a much needed service.

[gary]

In my case, my limited company name came up on her bill, so she didn't recognise it, which is something I was aware would happen, however, that is the only name WorldPay will let me use.
Kate

In your Worldpay setup you can set up a description of products which can help as that's sometimes incldued on card statements, so for example Purchase from Bitsnstuff.co.uk. You can also add t/a Bitsnstuff.co.uk after your Ltd co name so that appears on the statement as well, and that minimise the confusion.

Gary

[kairos]

Yes! Have a letter to the credit card co. ready in advance, describing your services in detail. provide a copy of the terms and conditions that your customer has signed and proof of the fufillment of the contract. You must be ready and respond immediatly but you can win sometimes. Sometimes the customer will have a history of this and the C.C co. will talk to you. Don't let people rip you off with out trying to stop it.

[KateCB]

Problem here is that even though the signature may say the customers name it may not be hers......we had one chargeback - delivered to the address on the ard, CV2 checks OK, AV Checks OK, signed for by the name on the card - even the telephone call we made to double check was answered alledgedly by the name on the card - we don't know what A Jones sounds like, so we had no way of knowing that A Jones *should* have been female (it was a male claiming to be Andrew Jones!) turned out that the actual owner of the card was away on bereavement time and the house had been used by a gang of fraudsters who had racked up a total of 6000 quids worth of sports equipment - not the type of thing an 80 year old recent widow would buy.....we lost out, even though we had done everything possible to ensure that the sale was genuine. :(

Kate
Htpp://www.martialdesign.co.uk

[KateCB]

And the URL - earlywarning.co.uk perhaps? I'll go and check it out!!

Just a thought, but were you teaming up with The3rdman.co.uk? They were at the NEC retail solutions exhiv=bition this week and I'm sure I saw you mentioned - or an I dreaming?! (always a possibility!)

Kate
Htpp://www.martialdesign.co.uk

[Early Warning]

you are correct the third man uses the cardaware database

[Steve2507]

Hi,

Here's what we do if we have a chargeback, (we definitely don't swallow the loss).

Firstly all orders and letters to customers are sent recorded so we have a signature.

We then send a letter to the customer saying that we have received a chargeback and that we are aware they may not have remembered the transaction and so accidently told their bank that it was fruadulent. In doing this we are being as nice as possible and giving them a reasonable chance to pay up.

If we don't hear from them, we then send another letter, this time increasing the amount owed to include a reasonable cost of issung the letters (we say £1 per letter). It also advises them that we will take them to the small claims courts. This usually gets a response and we usually receive the money.

Finally we take them to the small claims courts.

My thoughts are that the idea of a chargeback, when you have received the goods, is as much theft as walking into your local store and helping yourself to anything on the shelf and so should be dealt with in as much the same way as theft as possible. Unfortunately the police and banks don't want to know and so it is left in my hands to catch the people who steal from us.

Steve

[starsgazing]

Finally we take them to the small claims courts.


What happens if you lose?

Or if you win and they've moved house so the baliffs cannot trace them? The kind of people who fraudulently chargeback are not the kind of people who care about the actions of small claims court.

[maildodge]

I have got back a number of the chargebacks.

If have 3D secure you are covered on a number of chargebacks and I believe it is the issuing bank who will have to "cough up"

There are some instances where you are not covered so do look into it.

But since implementing it some time ago we have saved hundreds by being covered and rejecting fraudulent orders.

[IainW]

Question here,

If you get a chargeback do the card processing company i.e Worldpay, protx look upon you badly or give you hassle?

Do you have a certain amount of chargebacks and they YOU'RE OUT?

[blown away]

I wondered that too, Ian,
I only have paypal on the website at the moment, I wouldn't trust them as far as I could throw them to defend any chargeback.
I am going to get internet merchant status and go with Protx for my site shortly.

I have cardnet for customer present/not present transactions, but at the moment it doesn't have 3d secure because my admin is through adelante and half the time the avs doesn't work. I always take as many details from my over the phone customers as I possibly can, I tend to send out to quite a few work addresses so they are easy to check out.
I would imagine that it depends entirely on the goods that you sell as to the level of fraud you would be exposed to.