Go here

http://www.b2bnow.com/123696505/centers/ebusiness/editorial/4-21-Misc-ht3.html

or read below:

oops, it says i cannot reproduce it at the bottom so i will just put the above link.

wow, thats horrific news for some folks. We don't get many chargebacks at all but of course every chargeback ever made has also not been warranted. At least with us each case was a client using our services for several months and paying their normal rates then disappearing one day or cancelling only to also chargeback every single fee ever paid to us. Was there much we could do ? Not really! And its unfortunite for most hosts but it happens and its more than liekly that same user will do the same to the next host and the next and just keep moving around never paying. Other than starting those annoying collection notices from legitimate collections services and maybe tarnishing thier credit there isn't much you can do to get your deserved money. This ridiculous visa/mastercard chargeback policy will only further hurt hosts, after you unlawfully get burned by your client you have to pay $15k for it too ? I dont think so!

If you think visa and mastercard are bad. Checkout AMEX's policy.

Originally posted by bdraco
If you think visa and mastercard are bad. Checkout AMEX's policy.

Actually, I have always found Amex's charge-back department to be very fair and equitable, whereas MC/Visa has been horrible to deal with.

Over the years we've had perhaps 20 or 30 MC/Visa chargebacks, only 2 of which were reversed on our appeal. Compare that to about 6 Amex chargebacks, 5 of which we won on appeal.

I've found that the folks over at Amex actually listen to you. When you send a copy of your Terms of Service agreement that clearly states the customer is liable to pay the fees even if they don't use the service (just like the cable company, phone company, etc.), they actually take that into account. Not only does MC/Visa ignore the Terms of Service, they have flat-out told me they don't even want me to send a copy when I'm disputing a chargeback.

No - I definitely feel that Amex is a *much* better company to work with. Not only from a chargeback point of view, but also in terms of processing (we have about 1 or 2 charges a month that MC/Visa "holds" the money for 7 to 10 days before releasing it - that has never happened with Amex), customer support, and merchant support.

I held off setting up to process Amex cards for over a year after setting up the business, because I had heard horror stories about them, too. But from my experience, if I could afford to drop MC/Visa and only accept Amex, I would do it in a heartbeat. Unfortunately that's just not something I could do because far too many customers use MC/Visa. But I often dream of a day when we don't have to deal with them.

Jason

While we have never had an American Express chargeback I do agree when working with thier support it is much more friendly than via/mc .

I have also been told that our Terms of Service mean nothing to them when disputing a chargeback. They say the only thing that they accept is a Terms of Service on paper that is signed by the client.


Some of the large hosting companies like OLM do make you sign forms when you sign up with them.

I can't speak for the chargeback issue itself in an online sense (we've only just received our Visa/MasterCard merchant accounts, and not our Amex one) but the company I work for has had a few chargebacks in their offline venues, being a MOTO (Mail Order/Telephone Order) business by nature. Visa/MC...well, they're not the most pleasant people in the world to deal with. However, if you can approach them with infallible logic and as much evidence as you can muster, they generally shut up. In particular, credit card information filled out by hand can be very key since the handwriting can be analyzed and compared against any signatures that the credit card companies have on file (you're not meant to know that, however, so I never told you. :)

Now, as far as online measures go, the only two I'm aware of are to track IP addresses for every purchase and the AVS system that Visa and possibly MasterCard and Amex use in the "lower 48" (that's hoser talk for the United States, eh? :) Now, since the AVS system is not available in Canada yet, is there any other mechanism that can track potential credit card fraud both on a Canadian and an international scale?

I don't know the behind the scenes mechanism of AVS but in my experience AVS is bunk. We've put through charges with incomplete addresses, PO's, even incorrect addresses and they still went through with no errors. Not even a warning that the AVS failed. I wouldn't rely on AVS to prove anything.

AVS is not typically used to approve or decline a transaction... it's just informational.

I guess it's just as well we don't have it here then.

"I thought all you guys had up here were LUMBERJACKS and CURLERS! Ya wanna donut?" <--- from a beer commercial.

AVS seems to work fine for me, we get many declined transactions, simply because the AVS picked up the address, name or postal code that did not match.


I have 2 merchant accounts, AVS only works with the U.S. account, not the Canadian account, Canada does not use the AVS system yet.

Make your clients fill out and sign your TOS, then have them fax it back to you. It's a pain, but it will avoid any problems in the future with that client.

As for fraud detection and tracking, there really is nothing you can do except for keep a negative DB containing cards that have caused you trouble. Many large payment processing companies keep this type of DB. For example, at my company, if a charge back appears for ANY of the merchants on our system, that card is automatically entered into our Negative DB. This will at least prevent this card from being used again with another merchant. Now, the downside is, what if the chargeback was legitimate? Well, the cc holder can always call us and dispute this. I like this policy because it is in favour of out merchants and not individual cc holders.

I've had a terrible time with the AVS of instabill. I can't think of an order that has gone through without a problem. An extra zero instead of a dash has killed orders. Very touchy in my experience. I've had to call and head off things... (but in the spirit of fraud protection it works great! blah!)

Originally posted by Greg
I have also been told that our Terms of Service mean nothing to them when disputing a chargeback. They say the only thing that they accept is a Terms of Service on paper that is signed by the client.


Some of the large hosting companies like OLM do make you sign forms when you sign up with them.

That is not such a bad Idea to have your clients sign and then fax you their Authorization to charge and also their acceptance of the terms of service. This is something that we are thinking very hard about.

It will definetly be in your favor if the later on down the road they request a chargeback.