I'm doing work for a company who has had this obnoxious customer for a long time. He eventually cancelled his service, and demanded a $50 credit. We refused, and he charged-back 6 months of service (because that's as far back as you can go).

Anyone have experience with sticking someone like this to the wall???

Luckily we have never dealt with a chargeback, but did the user sign a contract or agree to your TOS or something of this nature. Also, I believe that they can only request a chargeback within 60 days of the purchase. If you can show that you provided the service as per your agreement, then they are screwed and I would contest the chargeback. Hopefully your merchant provider will fight this one out for you.

-Steven

If you don't have an actual signature, forget it. That's what Cardservices International told us.

I'd get a collection agency onto this person butt ASAP. Actions like these are in the same basket as stealing in my opinion. Challenging the chargeback can sometimes be difficult as you'd have to provide some evidence that they signed signed up and used your services.

Just remember! Collection agencies take about 15-30% to recover debts. All they do is initiate letters and phone calls. If it is a large sum of money, then they will persue it legally.

True, but if you're not getting anywhere with the credit card company, 70% of the money is better than none. Plus you get the added satisfaction of knowing the person is getting hounded by a collection agency, which in this case would be quite comforting I imagine. :)

plus they post the bad debit on your credit report, your credit report being far more valueable and important then some $50 charge...so they would highly rethink doing chargebacks

It will be VERY HARD to get the money back if you don't have faxed or mailed order form with client signature.

By the way, what type of card he used to pay?

wihtout a signature you stand no chance

I'd try to contest it anyway. You'd only be out a little time and effort.

If it is AMEX, contest it. AMEX is great about siding with the merchant. We win about 75% of all AMEX disputes by showing the sign up form with IP, our Terms, and any e-mails the customner sent.

Visa/MC. Forget it. Now that they advertise "no unauthorized charges", they could give two sh*ts about the merchant. What makes matters worse, they have some form letter from "S. Larson" who says something to the effect "Check the box for did not authorize and we will have greater success and returning your money". This form letter is in use by numerous credit card companies. Now, even customers who use to check other boxes and you could dispute ad win, we no longer can. No signature - no chance. We win maybe 5% of Visa/MC disputes now.

How do we battle this? We have a collection company collect on them. When they dispute, they usually put a number or name on the dispute letter. So you can first make sure they match up with what you have. We then charge two fees which are legal (at least in CA). We charge a $25.00 fraudualnat chargeback fee. This covers the $15.00 the bank charges and $10.00 for our time. We then charge a $20.00 collection fee. I think in CA you can go as high as $25.00. We then let a third party collect.

We have collected 100% by doing this. We have been called every name in the book by upset losers who ended up paying because they were buying a house or car, but when it comes to scum bags like this person, it is worth it.

Also, crete a few form letters for disputes. This will not be your last fraudulant chargeback. In it, we always state things like "We know this to be fraudualant, etc...". That way, when this person does it again, the bank will at least have a record of their chargeback history. Maybe you will help someone else out.

umbillcord.... ya been through this alot havent you? you seem to have all the steps down for taking care of these people!

great work...

Originally posted by whw
umbillcord.... ya been through this alot havent you? you seem to have all the steps down for taking care of these people!

great work...

We have been in business for a while. We have seen our TErms grow from a simple few paragraghs, to the 17 section - written by lawyer - Terms they are today. Unfortunitally people take advantage of systems. Many people write it off, we do not. A few mintes of your time makes sure scum bags have to pay or waste more of theirs.

The real issue is that the word chargeback is a buzz word now days. Everyone thinks that instead of working with a company who may have made an error or by simply just wishing to receive free service, that they will do a chargeback. We make sure they work for it. ;)

Which Collection Agency do you use? I'm surprised a Collection Agency would pursue a debt based from a chargeback.

Why wouldn't they? We are not going after valid chargebacks. Those happen all the time. We can not guarantee that with all the sign ups we get, one won't be fraudualnt and the real owner will chargeback. That is what they are there for.

I am talking about fraudualnt ones. Where you, the host, are owed the money. Collection agencies don't care what the money owed is for. The just need the total, the contact info and a few other basic things. If the person being collected on disputes it, we then send all supporting material, like invoices, logs, whatever we have, and we continue the collection. It the fraudualnt idiot says s/he will not pay, we authorize our collection agaeny to report them. Many collection agencies will not do it for under $100. After years in business, and trial and error, we found a good one locally.

We use to use www.access-receivables.com (http://www.access-receivables.com)

They are very good for small volume. However they do not report unless the debt is over $100. That is why we moved. Our volume grew also.

UmBillyCord, is it possible for Non-US based company to use any collection agency ?.

Keep Up the good work :). I feel very disgusted when ibill and worldpay send me notice regarding chargebacks and ask for any signature proof, I don't understand how do I ask customers to fax a signature for only $4 - $10 or so :(

Hello

I have two comments on this:

1. Just because they have successfully charged back, does not mean they don't owe you the money.
Send them an invoice and when they don't pay it set a collection agency onto it.

2. Chargebacks can be very difficult to initiate.
Someone used my Visa card number to order a large number of web hosting plans from Yahoo.
My credit card company has refused to put a stop on the card
because they say its recurring monthly charges which do not require further authorisation.
They have quoted 45 days to get the documentation from yahoo.
Meanwhile someone is having lots of fun with my card number.
I am cancelling the card completely and changing card company
So doing a charge back seems to be a lot more difficult for me than most of my customers.

Out of interest this card has only been used to pay a very small group of companies in connection with the business
(less than 10 and most apart from the advertising ones frequent this forum)
If I find out who did it I will not be responsible for my actions.

Sorry, that went a bit off topic...........

Gordon

UmBillyCord, is it possible for Non-US based company to use any collection agency ?.

I do not see why not. I am almost positive Access Receivables collects for out-side US based companies. I think they did collections for The Web Host Directory out of the UK for a while. You just need to be able to cash US based checks.

Originally posted by UmBillyCord
Why wouldn't they? We are not going after valid chargebacks. Those happen all the time. We can not guarantee that with all the sign ups we get, one won't be fraudualnt and the real owner will chargeback.

How do you and your collection agency differentiate the valid chargebacks from the frauds?

Originally posted by option


How do you and your collection agency differentiate the valid chargebacks from the frauds?

Valid
1) Client info does not match sign up info
2) Credit card is usually canceled within a few months once the person realizes the card was stolen.
3) We call to make sure the customer did not just make an error and not realize who we were. They then tell us "Sorry, I have no idea what web hosting is."

Fraud:
1) Customer used us for months. Decided to do chargeback to recoup money after they transfer to new host.
2) Customer thinks that because they "stopped" using us, but DID NOT tell us to cancel, that they can recoup all those months they were billed. As any host will know, unless a customer cancels, how are we to know they are no longer hosting?
3) Customer gets mad for some reason or another and expects *more* then a months refund. When they do not get it, they chargeback.
4) Customer sends in an e-mail that says "Cancel me. Joe." We reply, "Sorry, there are many Joes. Please use the online form to close account". Customer instead wishes to be stubborn and just does chargebacks later on.

Believe it or not, we have had all these happen. A few often. Especially #2

In life there are 3 inevitables

Taxes, Chargebacks and Death :D

I still don't understand how customers card companies will chargeback so easily and quickly when my card company won't.

To avoid the type 2 chargeback I keep any e-mails from customers that express any displeasure with any aspect of the service.
It hasn't helped so far but it may be useful if such a person was to
deny knowledge of the transaction later on.

Gordon