LloydsTSB Cardnet UNFAIR!!!

[collings]

Hello,

I have been with LloydsTSB cardnet for over a year now and they have undertaken a risk asseesment of my account. The bad news is they want a £20,000 cash secuirty deposit as I have a higher than usual chargeback claims.

9 out of the 10 chargeback i end up winning as the customer is simply trying to claim their money back which wastes my time and LLoydsTSB and the money leaves my account anyway and I get it back after the dispaute. Some are missed and immediately refunded without any question.

They are taking 20% of my card amount taken DAILY until they get the £20k, I dont even make 20% profit at the moment and they will simply close me down if this continues.

I would try another merchant but unfortunately I had bad credit some years ago and fear this will ruin my chances.

Just want to voice my concern over this as I didnt know this would/could happen and wondered if it had happened to anybody else?

The amount of chargebacks to sale last year is like 0.4% and I feel they are being very unreasonable, especially in times like these.

Chris

 

[AndyP]

Hmmm... well I don't really think anyone can comment much given that there isn't much detail here really.... one would assume that the risk assessment was based on some sort of criteria. That said, I do feel for your position. Are you an FSB member? That might help. Also, even if you were previously deemed to be a credit risk, assuming that this is in the past then it may not influence the here and now. Be up front about it, if asked, in your application. Its not the bad credit per se that is really the issue, its (possibly) lying about it.

Clearly you have to do something as you cannot put yourself out of business (or allow your bank to effectively do this to you).

Finally, why do you get a higher chargeback rate than others? You need to look at this as a priority. And when you have looked, you need to address the reasons for this situation.....

 

[emerchant]

If we are complaining about payment processors you might like to watch out for this one on WorldPay. I get virtually no charge backs but when one came along I asked if I could just agree with the customer to refund the customer and avoid the chargeback (and fee).

The customer had (initially) gone directly to card issuer and didnt contact me, I found the functionality to refund the customer was blocked in their merchant admin area and they told me I would have to get the customer to contact card issuer to withdraw the chargeback request, then I could refund instead. Customers are not going to bother with this when they get the money either way.

I have been using WorldPay for years.

Am I missing something or should I not just be able to say "I dont want to bother to challenge this just refund immedietly no issues" (and no charges)

 

[PayVector]

Collings,

You say your chargeback rate was 0.4% over the last year. What was it specifically for each of the last three months.

Say for example Month 1 of last year you had 0% chargeback and last month you had 2% chargeback this would flag you under card scheme rules for card scheme merchant monitoring. There is basically a 3 month window if you company is over card scheme thresholds for you to get things under control. If you do not you will lose your account.

However .4% is still pretty high. All card processors hate chargebacks. Especially UK ones as they still do things manually. Acquiring banks shed merchants who cause them undue amounts of chargebacks by making it next to impossible for the Merchant to remain with them. IE by enforcing a 20k hold back on your processing.

Your only option really is to look at why you are getting chargebacks and implement procedures and business practices to stop them. It could be as simple as the wrong descriptor is appearing on their statement and is confusing your customers. Or you are not being clear in your T&C's what happens after purchase.

Hope that helps.

 

[quikshop]

Are you in a high risk market? What sort of fraud prevention do you use on your website? There are some simple measures that can cut fraud through your website by significant amounts.

If you approach Lloyds Cardnet with a pro-active programme to reduce dodgy orders they may reconsider their own risk assessment about your business.

 

[collings]

Hello,

Most of the chargebacks are due to customrs claiming money back when they are in receipt of their order. Royal Mail have delayed quite a few orders recently and customers want to claim money back for the delay.

I end up disputing them and winning 9 out of 10 times. My chargeback percentage over the last 3 months is 0.42% but would be much lower if people just didnt claim it back.

Anyone got £20k to lend me?? lol

Chris

 

[Nickdavis87]

The problem (asfaiK) is that the banks have fixed fees for every chargeback regardless of whether the customer wins or loses, hens the problem you have found yourself in

 

[jubba]

It did not take me long to find this online I looked and found this forum and am not at all supprised to see this thread.

I run a business that has been with LLoyds card net for some 6 years now, I have recieved a letter from them today saying that my business with them is deemed high risk and they want £50,000 cash security.

They are willing to take 5% extra on top of there charges over a few months to cover this amount.


This is not due to chargebacks as we have very few in fact I cannot remember the last time we had a charge back letter.

If we do not comply then they will stop there service on the 13th of next month.

I have 11 staff and no bad credit ratings at all.

My only crime as far as I can see is not giving them managment accounts when they demanded them (due to staff illness). that is not there reason that is my assumption. I am seeing my bank manager this week which was already arranged (Again LLoyds). but my intention is to swap services to another party as I do not like being blackmailed. So I will comply until I have made alternative arrangements but I totally bemused by there actions.

They will generally have about £70,000 of my monies presently as they do not pay into my account that quickly and they want another £50,000, wheres my guarantee they are not going to go bust?

I have been sold lots of Lloyds services including insurances ect personal accounts, pensions ect and they will loose my business for sure.

I am going to contact a Jornalist from the BBC that came to my business and interveiwed us which was on the news re VAT changes and the affects to our business, and see if they are interested, but feel I should make the alternative arrangements first.

Tim.

 

[PayVector]

The problem (asfaiK) is that the banks have fixed fees for every chargeback regardless of whether the customer wins or loses, hens the problem you have found yourself in

This is correct. Regardless if you win the dispute or not the chargeback is still counted to your overall percentage. The fees are also still charged to the merchant.

Most of the charge backs are due to customers claiming money back when they are in receipt of their order. Royal Mail have delayed quite a few orders recently and customers want to claim money back for the delay.

If delays from delivery are causing you to receive chargeback then you need to look at other options and or putting statements into your purchase terms and conditions to cover the delay window. Also adding in a statement onto the after purchase email to the effect of :

"Please be aware we have been receiving reports that there has been delays to delivery due to problems within Royal Mail. If you do not receive your delivery on time please contact us direct so we can help resolve the problem"

 

[groovyjon]

Have you looked at having the 3D Secure facility on your account (where the customer enters a password on an intermediate page provided by the bank)? That should drastically reduce your chargebacks as the liability is with the bank, not you.

 

[RyanMitchell]

i'd leave and switch my service.

I cant stand when a Bank does something like this to me. They dont show any loyalty so why should you?

 

[Billmccallum]

i'd leave and switch my service.

I cant stand when a Bank does something like this to me. They dont show any loyalty so why should you?

Did you notice the date on the thread....2009

 

[RyanMitchell]

Did you notice the date on the thread....2009

oh... how embarrasing!

 

[Mainland]

Still some valid points raised though regardless of date. I would be looking at why you are getting chargebacks before moving elsewhere. If it is a simple case of delivery agents letting you down then change them. There are plenty of others competing for the business. If it is a case of a poor quality product or service then address this first. The odd chargeback is one thing but a consistent stream of chargebacks is your customers trying to tell you something.

 

[Sparx]

Still some valid points raised though regardless of date. I would be looking at why you are getting chargebacks before moving elsewhere. If it is a simple case of delivery agents letting you down then change them. There are plenty of others competing for the business. If it is a case of a poor quality product or service then address this first. The odd chargeback is one thing but a consistent stream of chargebacks is your customers trying to tell you something.

The point is the OP would've (or should've!) already resolved his chargeback issues in the last 3 years you'd hope..

Plus the OP won't read this, he hasn't been around for a while..

Last Activity: 12th February 2010 17:12

 

[Optegris]

Thread has now been locked to prevent further bumping.