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Chargeback ratio's are per account, but also have a minimum absolute threshold. So it's say, 2% chargeback AND at least 200 chargebacks before penalties kick in
by fooey 6y ago
Chargeback ratio's are per account, but also have a minimum absolute threshold. So it's say, 2% chargeback AND at least 200 chargebacks before penalties kick in.
In a past life I worked for a place who had a few hundred processing accounts to load balance it all out because their chargeback rates were way too high. If an account gets close, you just don't use it for a month, or you throw a bunch of "safe" recurring charges at it to dilute it, or you hold a batch and send them through right before the rollover. Lots of ways to play number games.
Most of the execs did go to prison though, so don't take this as advice, but to be fair, the processors are the ones who told them to use those tactics.
- folli 6y agoThey went to prison for load balancing, or how does this relate?
- thinkingkong 6y agoGambling.
- fooey 6y agoThe business was just run of the mill "get rich on google" and "free government grant" garbage that was common in the 2000's. Ironically, they made so much money doing their regular business the owner bought a small US based bank and was running online poker processing through it. When "black friday" in the poker world happened, the bank failed and everything fell apart, but so far as I know, no one involved was ever charged with anything related.
- fooey 6y agoThe technical reason was bank fraud for all the shell corporations they set up in the process. The bank claimed they had no idea they were all related, even though every application had the owners name on the paperwork. To be clear, it was a bad company. However, the bank 100% knew what was going on and the merchant accounts 100% knew what was going on. So long as they were making money, and chargebacks make them a lot of money, they were happy. In my opinion the people running the company were just naive enough to not know how to cover their asses as well as the money guys.
- stickfigure 6y agoDon't tease us like that! Sounds like a fantastic blog story.
- fooey 6y agoIt's even better than you think. In the process two state AG's lost their careers, multiple US senators were implicated, a bank collapsed, there was kidnapping, human trafficking and drug running, and in the end created urban legends of gold bars being buried in the mountains to hide it from being seized by the feds. I don't know of anywhere that has it all written out, but here's a related NYT story with a fair bit of it: https://www.nytimes.com/2013/06/16/business/in-utah-a-local-hero-accused.html https://www.nytimes.com/2013/06/16/business/in-utah-a-local-...
- stickfigure 6y agoOH NO WAY! That guy played a role in the documentary Sons of Perdition, rescuing "lost boys" from the fundamentalist mormons. Sort of. I'd read that sometime after the movie release he was exposed as some sort of fraudster but this story just gets crazier...
- deleted 6y ago[deleted]
- vilifiedtwin 6y agoExecs went to prison? Seems like they didn't like to share with local politicians...