Chargeback Question

[Karen]

I have just received a chargeback notification. (oh joy!)

The client who is claiming the chargeback has had an account with me for months. His web site is still on my server, he hasn't moved the site anywhere at all. His claim is that he is not in possession of his credit card, yet he ordered the account, set up the account, and I still have the account on the server.

My question is, can I suspend his account, or change his passwords, while the chargeback process is being investigated? My thinking is that by suspending the account, or changing the password, he can not remove the site from my servers. Thus allowing me to prove that he is hosted on my server.

Any ideas or suggestions would be helpful.

Thanks,
Karen

[beley]

Well, just by making a copy of the files you could prove he put them on your server. Winning a chargeback in our industry is usually impossible. Unfortunately the credit card companies look at ISP services as if we were selling P0RN or something...

Anyway, you can do something about it. I hope you have the IP logged from the original order. Trace it back to his ISP, that will help just having the info. Get the name on the credit card, look it up in the phone book or www.whitepages.com. Call him and ask why he requested a chargeback. It can't hurt. Some people really don't even think it hurts a merchant... it's just a way to cancel service to them. Explain that you get charged $25-30 for every chargeback and say you'd be happy to cancel their account if they'd stop the chargeback.

If not, then compile all the info, your TOS, etc., and write a letter or email to your merchant provider. Be professional and as informative as possible. Include signup dates, any other billings by you that succeeded, how long he has been a customer, etc. Explain why he should not be granted a chargeback. They'll investigate and make their decision on the matter. It can go back and forth for some time.

Like I said above, it's a hard fight and not many will be won. I hope you are one of them. Best of luck!

[Karen]

Well I have contacted the customer, and it has been straightened out (hopefully). It seems as though the customer never read the fine print, therefore he didn't know who 'paysystems' was. He did the chargeback because he didn't recognise the name. (sigh)

Anyway, supposedly he has now contacted the company to reverse it. So I suppose in 3 months or so I will get the money credited back. (Or maybe he won't really contact the credit card company and I will never see the money. I have even sent the email from my client where he states that he didn't know who the company was, and that he would rectify the situation. To which I also have to question what good does having a TOS and AUP anyway? They don't even matter in a chargeback.)

<rant> however, when he started the chargeback, he told his credit card company that he was not in control of his credit card. Which, as it turns out, was a lie, but that is besides the point.

What if he really didn't have his credit card? And it was a fraud charge? Doesn't Paysystems boast about their fraud protection? If it really was fraud, shouldn't Paysystems pay the $25 chargeback fee, and not the Merchant? It would only make sense to me, since in a real fraud situation they are the ones who approved the charge.</rant>

Karen

[Robert]

In regards to Chargeback, if we list in our TOS/AUP/Billing Policy that there will b e a $25 dollar fee on all chargebacks, can that be valid and can we use it against the customer?

[Karen]

I thought of that as well. But won't they just do a chargeback against that also?

Karen

[Robert]

Karen,

Providing you inform the CC provider of such a charge, I doubt they would authorize a chargeback on that.

[markblair]

In the past I think I tried running a chargeback once on a local company and I was told by my credit card company that there was a time frame when I could do such a thing. I believe with Visa, they would only do it within the first 30 days of the charge hitting my account. So if someone is using your service for six months and then decides to run a chargeback, the credit card company shouldn't even allow it. I thought this was a general practice. To fight it though, write a letter explaining your side of the situation including the payment provider you use and send that to the persons credit card company. That should help out just in case he doesn't remove the chargeback.

[EDIT] Also, Discover is one of the best credit card companies that doesn't just favor the consumer. They actually listen to both sides of the story before making a chargeback stick. Visa and MasterCard appear to just go with what the consumer states.

[Robert]

Mark,

I was told differently by my merchant provider. If a person signs up for a year of hosting and pre-pays for 1 year, you cannot refund them (technically speaking) the unused months, you must refund them 12 months. Same goes for chargebacks. If they do a chargeback 9 months after ordering, it's qualifies (pending you didnt provide excellent service, yada yada, and that they just wanna be scams and snerts and get their money back).

[markblair]

Wow, I should have tried that with my last host. I had a good six months left when they started having problems with servers getting DoS attacks and viruses along with several major security issues. Even if it didn't work, it would have been worth the try. :(

[emstro]

Suspend the account and immediately add "right to suspend" to your AUP :)