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Visa changes chargeback dispute program

• brianhorakh 4y ago
  This is awful. I've canceled subscriptions so many times only to get billed again, and again, blabla "it's a bug in the billing system" run around. So now vendors can keep auto billing with dark patterns such as unnavigable automated phone lines, and visa is going to take their side? (because the merchant will have proof of billing history?) I hope Amex doesn't adopt these rules. I am going to think strongly about canceling my visa cards as a response. Bitrix24 a SaaS crm/VoIP service was the worst abuser I can recall (kept randomly reappearing a $10.00 months after id asked visa to block them). Free Trial My ass.
  • InfamousRece 4y ago
    Cancellation is not always easy. Any “recurring” charge will helpfully reopen your closed account. I guess it’s better to just use prepaid gift cards for subscriptions.
  • vineyardmike 4y ago
    I think if you can prove that you tried to cancel and the merchant screwed up you should be fine. Hopefully you have a paper trail of them admitting its a “bug in Billings”. Aside: One of the best things about AMEX is their customer support around chargebacks and I agree I hope they stay super friendly to this.
    • twblalock 4y ago
      I switched back to Amex despite them offering worse rewards than my other card because of this. Other card: I returned an item, with proof of delivery via UPS tracking. Never got a refund. Opened a dispute. Weeks later, the dispute was resolved in the merchant's favor despite the merchant providing nothing as evidence except the original receipt. I had to call the help line, deal with several uncomprehending service reps until one of them re-opened the dispute, asking me to resubmit the same documents I submitted the first time! Finally the dispute was resolved in my favor a month later. Amex: I ordered some items from a local store to be delivered and the order was cancelled without my money being refunded. I received an email with a few questions, which I answered. A few weeks later the dispute was resolved in my favor. I still need to carry another card because some merchants don't accept Amex, but I use the Amex for everything I possibly can. I'm giving up some cash back rewards to do so, and I'm also paying an annual fee, but that's a small price to pay for getting better service when something goes wrong.
      • kylehotchkiss 4y ago
        Amex Gold is pretty decent for travel rewards (4x for food/groceries) and amex points are ranked pretty well for value by the points guy (https://thepointsguy.com/guide/amex-points-value/ https://thepointsguy.com/guide/amex-points-value/) - certainly structured differently than cash back but free travel with a year or two of normal expenses isn't too bad a deal
        • twblalock 4y ago
          In the past few years the concept of "travel" has become a bit more difficult. I decided I'd rather have the simplicity of cash back instead.
    • yencabulator 4y ago
      So what you're saying is that the vendors will now strive to make it harder to "prove you tried to cancel", just like they're already striving to make it harder to cancel.
      • vineyardmike 4y ago
        Send an email to legal@company.com or ceo@company.com or any known-good generic email they have with a note saying “route this to legal”if the normal gui or CUstomer Support team doesn’t work. I’ve heard investor relations is always a good address that’s monitored by people that have spare time. You have now officially provided a written notice to company. If it’s a really big charge or something serious, send a certified letter. That means the US government is now testifying to the time and date of them receiving letter. Share that with Visa and see if that changes their opinion on the chargeback. Be polite, not emotional. Don’t threaten a lawyer or use any language you’d see on a TV legal show. If you’re in California feel free to cite their violation of this law [1]. Don’t threaten to sue. Don’t threaten a lawyer. Just mention that you have the right and you can’t use the UI as expected. If it’s bad you can say something like “if this isn’t resolved I may avail myself of other options afforded by $LAW”. Don’t specify what, don’t threaten they’ll regret it. Just let them know you are someone who is serious and non emotional. “Company X, I have tried to cancel this service but I am unable to due to X. After talking with CS they said it was due to $Bug. I talked with $Person at $Date. Let this serve as a formal notice that I will no longer be paying for service and no longer wish to be charged. I will be instructing Visa to reject further charges after $new_future_date. Please Acknowledge Reciept of this notice. Signed Person. Todays Date is X” https://techcrunch.com/2018/07/04/californias-new-online-cancellation-law-benefits-many-disgruntled-subscribers-in-other-places-too/ https://techcrunch.com/2018/07/04/californias-new-online-can...
        • yencabulator 4y ago
          > After talking with CS they said it was due to $Bug. Customer support will be (/is) trained to never say such a thing, then. Also, you are normalizing the idea that customers can be forced to jump through arbitrary hoops; you've just invented one yourself. I'd much rather have this behavior be illegal (see recent FTC ruling).
    • mission_failed 4y ago
      Meanwhile Amex sided with an Australian airline that cancelled flights due to covid, despite the airline being in the news as in financial strife and going into administration.
    • loeg 4y ago
      How do you prove to Visa's satisfaction that you called to cancel, for example?
      • thaeli 4y ago
        Hard copy sent via registered mail? There's probably a service for this.
      • vineyardmike 4y ago
        Ask them what they want as proof? I think a certified mail to legal of the company (and a reasonable period of time for them to correct) is probably a good start. If they actually tell you the bill was a mistake, that should definitely be proof.
    • dkjaudyeqooe 4y ago
      I never use Amex because they're the only card that has denied me a chargeback. Basically the hotel runs a nice little scam and Amex enables it. They seem to be very shy about accepting chargebacks to hotels. The scam was that you'd book a cancellable room and the hotel would cancel your booking after they accepted it due to "unavailability of the room" (wtf), then rebook an identical "alternative" room "at the cheapest rate" which happens to be an uncancellable room at $1 less. Why? Because they are impossible to find. No taxi driver can find them. Maybe don't exist. By the time you find this out you can't cancel the room.
  • rurp 4y ago
    I totally agree. Chargebacks are one of the few tools consumers have to fight back against shady companies. I think I've only done one or two chargebacks in my life, but I have threatened them other times when dealing with dishonest companies, which usually leads to them suddenly resolving an "impossible" issue. If Visa ends up crippling this ability there's no chance I'll use their cards again.
    • toomuchtodo 4y ago
      > If Visa ends up crippling this ability there's no chance I'll use their cards again. Curious how this makes other options more competitive. If liberal dispute policies are one of the value props of using a CC, and merchants eat the fees, the value of using a CC declines if dispute resolution is tightened up making it closer to parity of irreversible funds transfers (although there is still the float component not yet solved for in the financial UX of most financial service providers). https://www.moderntreasury.com/learn/what-is-fednow https://www.moderntreasury.com/learn/what-is-fednow https://news.ycombinator.com/item?id=32098635 https://news.ycombinator.com/item?id=32098635
    • newhotelowner 4y ago
      It also use by customers to get what they want. Just yesterday, a guest called and asked to return 3rd night stay because it was more than the 2nd night room rate. Guest booked the room online and had a confirmation email with a daily rate, signed a physical registration card that shows daily rate during check in but insisted that we are overcharging him. He thretened us with a chargeback. I returned the money because fighting chargeback is a losing battle for us. They booked 8 rooms as a group, and I basically told him, that they are not welcome here next year and he should explained that to his group why we won't let them stay. Also told him, I am going to call everyone in his group and tell them not to book at our location. --- A couple weeks ago, bank called and wanted to verify the charge. Bank wanted to know if the charge was valid. I told them it was charged through chip reader, and I have a video of the guest using the card. She is like, thats all I need. I m going to deny the chargeback. A lot of guest book room, and when they forget to cancel they use chargeback.
      • 4y ago
  • phpisthebest 4y ago
    This is why I use capital ones service to create a new number for every vendor (similar to privacy.com) then I can just turn off that card once I cancel the service
    • abfan1127 4y ago
      which service is this? Do you have a link?
      • phpisthebest 4y ago
        It is part of their eno service https://www.capitalone.com/digital/eno/virtual-card-numbers/ https://www.capitalone.com/digital/eno/virtual-card-numbers/
      • stubish 4y ago
        Wise (wise.com, formerly Transfer Wise) now let you create virtual credit cards. Accounts with them seem to be available to most of the planet.
    • heliodor 4y ago
      Citi offers virtual numbers too. Mercury does too. And many others.
  • snoopy_telex 4y ago
    Privacy dot com. It's the only thing I use for anything that's not a major player (Amazonish). It's saved me a lot of time and hassle. Cancel the account and the card at the same time.
    • AareyBaba 4y ago
      Are you comfortable with the recent change in Privacy.com ? They are using Patriot Bank out of North Dakota as an intermediary. Previously Privacy.com would directly debit from your checking account. In the new process you are signing up for a credit card with Patriot Bank under the hood. They pass on your checking account info to Patriot Bank and somehow money gets exchanged. I don't fully understand the process and don't trust men-in-the-middle like this. I wasn't satisfied with the information I got from Privacy.com customer service. Has anyone researched this and confirmed there are no shenanigans in the new process. I used to use Privacy for many years but stopped because of this.
      • josephcsible 4y ago
        What specifically is your concern about that new process?
        • AareyBaba 4y ago
          Old process: Me -> Privacy.com -> My checking account New process: Me -> Privacy.com -> Patriot Bank credit account -> My checking account. My concern is I am forced to sign up for Patriot Bank credit services. Also Patriot Bank gets my checking account information.
          • snoopy_telex 4y ago
            I actually use a bastion bank account so privacy and patriot never get my real one. I push money to the bastion bank and if they do something funky, my exposure is limited.
      • moduspol 4y ago
  • danlugo92 4y ago
    www.privacy.com
  • jimbob45 4y ago
    It cuts both ways. You could make a very strong argument that "friendly fraud" is the single reason that the porn industry is having to turn to crypto. Husbands are frequently caught by their spouses and, while pretending that the charge was fraudulent, commit "friendly fraud" themselves. I, for one, am very happy to see Visa taking steps against this. We've kvetched for years over how how much power payment processors have in the system and now they're finally doing something about it (themselves, to boot!).
  • notyourday 4y ago
    And with this single change Visa just ensured that no one other than Apple and Google has a chance of making a significant dent App Store fees.
• tumetab1 4y ago
  Be aware that "When most people think of fraud, they think of stolen account numbers or identity theft, but first party misuse, which can account for up to 75 percent of all chargebacks[1]" looks like marketing spin. The reference points to a marketing newswire that also states "More than two in five (42%) of surveyed consumers who have filed disputes did so due to true fraud—e.g., unauthorized purchases made with their payment information." https://www.globenewswire.com/news-release/2021/12/15/2352951/0/en/Report-Consumers-Admit-to-Submitting-False-Fraud-Disputes-to-Get-Their-Money-Back.html https://www.globenewswire.com/news-release/2021/12/15/235295... Going deeper the actually 75% comes is stated on this PDF which links (sources) from a company that sells... sells dispute charges services. https://pages.sift.com/rs/526-PCC-974/images/ebook_Sift_Q4_2021_Digital_Trust_Safety_Index_Digital_Fraud_and_Disputes.pdf https://pages.sift.com/rs/526-PCC-974/images/ebook_Sift_Q4_2... Others things to note: No statement by Visa in decreasing taxes on chargebacks to merchants.
  • twawaaay 4y ago
    Chargebacks are used as a kind of punitive measure directed at merchants. The idea here is for merchants to figure out the only way to deal with chargebacks is to not get chargebacks at all. For now this works because for some reason relatively few cardholders are educated enough on what are and how to use chargebacks. I personally wouldn't be using credit card if not for the chargebacks. I am still paying off entire balance every month, but I am much happier knowing that any dispute on a transaction with a credit card is going to be so much easier than any other form of payment.
    • supertrope 4y ago
      I worked at a company that shrugged off customers' threats to chargeback. It was seen as a way to shift customer support load to the bank! Chargebacks mostly fell into two categories: those who didn't recognize the business's name or financially unstable customers who charged back because they ran out of money at the end of the month and wanted to get some back (sometimes every month). I guess it helped it was a low risk industry selling a service that can't be resold as only dumb criminals would use stolen credit card information to pay on an account with their name on it.
• runnerup 4y ago
  Considering temporary card numbers like privacy.com are also getting harder to use… I guess I’ll just open and close online checking accounts giving 30-day windows for online purchases using a debit card. After 30 days the debit card will no longer be valid, linked to a closed account, and cannot be charged recurrently.
  • vineyardmike 4y ago
    FYI usually banks keep accounts “shadow open” for upwards of 6mo in case a charge comes through. So you still may get over drafted. These sort of schemes will probably make chargebacks harder to use than just closing the account that would do the billing. If the card is leaked/frauded than you’re already legally protected. If you just want to avoid the act of cancelling an account you opened… then you’re playing into the arms race that is making these things harder. > but first party misuse, which can account for up to 75 percent of all chargebacks, is when a cardholder disputes a legitimate purchase that they intended with their issuer. This includes customers refuting valid purchases such as long-forgotten recurring subscriptions If you agree to a purchase, and sign up for something re-occurring, you’re committing to it. You have to tell the business to stop charging you, you can’t just stop paying.
    • runnerup 4y ago
      And what when the 8th company this year refuses to honor the proper cancellation? Lawsuits take way more energy.
      • vineyardmike 4y ago
        My point was mostly that you have an obligation to try to do it the right way, and that bank accounts are not usually “hard closed” and won’t reject dead charges. Tbh I’ve never experienced this much failed cancellations so i don’t know for sure but there was a HN post about how easy arbitration was so honestly could be a good avenue. Or talk to your attorneys general
  • snoopy_telex 4y ago
• rvz 4y ago
  > A recent study by SIFT found that nearly one in five consumers who have filed a chargeback dispute have committed first party fraud by submitting false claims in order to get their money back on legitimate purchases. In fact, according to the NRF, the losses from friendly fraud totals over $25 billion a year. Yes, this is a problem and so many merchants are getting their accounts and funds locked up by being unable to fight these friendly fraud disputes that have been taken advantage of by the consumer. This sort of fraud hurts both the consumer and mostly the merchant as the bank which doesn't know any of the context of the payment takes 3 seconds to see the dispute and 98% of the time, the merchant loses and the bank forcibly takes the money away and gives it back to the customer, especially for digital subscriptions. Instead the consumer should contact the merchant directly to resolve the dispute. At least VISA knows it is a problem. What is Mastercard doing about this?
  • nathanaldensr 4y ago
    When both sides of a marketplace are willing to commit fraud, what can the middleman do? Most likely not much. As long as purchases are not "notarized" or otherwise observed in person by a neutral third party, it is very, very difficult to reliably and fairly police unethical or fraudulent intentions for internet purchases.
    • im3w1l 4y ago
      Keep the money for themselves. Disincentives fraud, and it's profitable too!
  • wilde 4y ago
    > Instead the consumer should contact the merchant directly to resolve the dispute. Hahaha. Have you tried this recently? I had a company ship us defective baby food with broken seals. They said they couldn’t refund but they were happy to ship us a replacement. When we said we wanted a refund instead, they said “whoops we already shipped it”. It arrived with more broken seals. I issued a chargeback. Got my money instantly. Some merchants are bad. Visa’s whole value to me is that they insure me against these situations.
• tehwebguy 4y ago
  > “Friendly fraud is not always friendly, especially from a merchant’s perspective,” said Mike Lemberger, Senior Vice President of North America Risk at Visa. Incredible quote, Mike must be the smartest guy in the whole company!
• gruez 4y ago
  Many commenters in this thread seem to be against this change, but looking at the article they seem... pretty reasonable? >With this change, if merchants can provide additional data or evidence to show that the disputed charge is valid, then the dispute will be invalid. >This change will empower merchants to protect themselves against first party misuse by enabling them to submit additional evidence that a purchase was indeed legitimate and authorized by the cardholder in order to stop the dispute claim. Additional examples that can help identify that a purchase is legitimate include a customer using the same payment credential previously at the merchant, login credentials, proof of use of a product and more.
  • uoaei 4y ago
    It sounds like a great way to create a system that concentrates and abuses power, not unlike a "secret court". If the company claims something like "it's covered in the ToS/EULA" what recourse do consumers have if that statement is not exactly true? If Visa agrees with Walmart about some nebulous wording in legalese, where a judge would read it differently, how can consumers advocate for themselves? Lawsuits are an option only for those with the time and access to pursue remuneration through the legal system so that is not a serious option here.
  • twawaaay 4y ago
    If I understand this correctly it is essentially doing second presentment preemptively. ("Hey, Visa, just in case the client questions authorisation, here you have some additional data to shoot those down immediately without you having to contact me for those details")
  • tristor 4y ago
    The biggest issue here is that the "proof" allowed essentially means recurring billing scams can run rampant without any recourse. Unfortunately a significant amount of "businesses" online and offline are forms of recurrent billing scams. Chargebacks are the /only/ protection consumers have against this form of scam, other than going to court at their own expense. This GREATLY weakens consumer protections for basically no upside by enabling bad actor merchants. End of story.
• BrandoElFollito 4y ago
  I am not sure I understand the problem. Why is everyone telling about VISA? Do you deal directly with VISA? Here in France (and generally, the EU) your interlocutor is a bank that happens to deliver VISA or Mastercard cards. If something is wrong, you contact your bank which is obligated to give you back the money and then does an investigation afterwards.
  • tristor 4y ago
    This is not how it works in Europe or in the US. The chargeback occurs through the payment processor, and both the merchant and the bank issuing cards with Visa logos are customers of Visa using their payment network to manage charges. When your bank issues the chargeback on your behalf, they are doing so through Visa's systems.
    • BrandoElFollito 4y ago
      Yes, I understand this. My point is that I talk to my bank only, VISA is not in the picture at all. I do not care about their (VISA) internal regulations or decisions, I am a customer of a bank and the bank has obligations towards me, by law.
      • tristor 4y ago
        If those obligations are by law in your jurisdiction, than you are probably covered. In jurisdictions where that is not the case, the bank is bound by Visa's policies if they want to issue Visa logoed cards. That's why this is such a far-reaching and problematic development.
  • lostgame 4y ago
    That’s not the way it works, globally.
    • BrandoElFollito 4y ago
      Globally it is. I am a customer of a bank and VISA is not say all in the picture (from my perspective) when I have a claim. How the bank deals with that vs VISA is not my problem, not are any VISA regulations, fees, whatever.
• rationalfaith 4y ago
• atourgates 4y ago
  There's a tremendous amount of devil in the details of how this is implemented: > "With this change, if merchants can provide additional data or evidence to show that the disputed charge is valid, then the dispute will be invalid." I've seen (from the merchant side) unfair chargebacks. No question. But my fear is that Visa is going to implement this something like YouTube copyright claims, where basically, the merchant just has to respond and that's it. The last chargeback I issued was for an electronics seller who never credited me for a return. I explained the issue to American Express' automated system. Uploaded receipts (including the seller's return instructions, and delivery confirmation of the returned item), and got an instant refund. I'd love to know how Visa's changes will affect this type of chargeback. It's wasn't "fraud" in the sense that someone used my credit card without authorization. But it certainly was a merchant that didn't follow up on their end of the deal.
  • bestouff 4y ago
    Then they'll finish to loose it to Paypal.
• metadat 4y ago
  Do we really need to further "empower" merchants? TFA is saying Visa is amending their chargeback policy to empower merchants to continue billing people for long-forgotten subscriptions. I'll not be using my Costco Visa card for anything other than Costco gas purchases from here on out. Visa is making their position clear; anti-consumer, anti-little-guy, pro-ripoff.
• davidg109 4y ago
  As a customer who has had to go through the chargeback process (against a well known furniture company), the company provided what they felt was “proof” of the charge being valid. Fortunately, I had counter-proof that the proof they supplied was invalid. I won the dispute in the end. Under this new policy, it seems my chargeback would have been denied without coming back to comment … am I reading this correctly? If so, then this is one major reason now for me not to use Visa in future.
  • A4ET8a8uTh0 4y ago
    This is how I am reading it. I will be asking my wife to not use VISA for any recurring payments ( as those apparently will be to be harder to dispute ). The primary benefit of credit card was the included consumer protection. If that is gone, credit card will stop being as beneficial.
• thathndude 4y ago
  I am a consumer protection attorney who does work advocating for individuals with credit card and debit card disputes. I’m pretty opposed to this change, even though it’s veiled in terms of fairness. The fact is, the banks and Visa are far too quick to deny disputes. This reeks of all of the times that an industry foists some type of “protection“ on consumers to address some alleged abuse of the system. For example, you used to be able to discharge student loans in bankruptcy. Then the industry made up a BS narrative that people were taking out tons of loans, getting their degrees, and then filing for bankruptcy em masse. It was a lie. The number of people who are filing for bankruptcy and getting student loans discharged was infinitesimally small. But that didn’t stop them from lobbying Congress for modifications that prohibit the discharge of student loans in bankruptcy. And, well, you know how the rest goes. My point is, the alleged abuse is almost certainly a very small, or even, non-issue. But these changes will have dramatic, negative repercussions on a large swath of customers.
  • Waterluvian 4y ago
    Re: student loans. Wow really? I thought that abuse would be a certainty given grads have no assets and you can’t repossess a degree.
    • thathndude 4y ago
      Not at all. The whole thing was a canard. And it makes total sense. Filing for bankruptcy is no small thing. The narrative was something like “people will just file bankruptcy“ but you don’t “just“ file bankruptcy. You destroy your credit for 5+ years when you file bankruptcy. So good luck to all these grad students getting a mortgage. Heck, there are a lot of jobs out there where filing for bankruptcy will weaken your chance of getting the job or outright exclude you. People don’t halfheartedly file bankruptcy. And beyond those systemic barriers, believe it or not, most people aren’t looking to just screw over whatever entity On their loans. You think people want to screw over student loan companies because you exist in the current system where predatory behavior occurs, where you can’t discharge your loans in bankruptcy. As such, you are used to seeing stories about peoples lives being ruined by their student loans. That’s why people hate student loan companies. In a world where student loan companies weren’t so predatory and encouraged to be predatory by unfair bankruptcy exemptions, the narrative towards that might be completely different, and more favorable. *Just to get a head of a comment that might be forthcoming, I am well aware that student loans actually can be discharged in bankruptcy. But they are given favorable treatment (for the creditor), and you have to make an above and beyond showing to have them discharged relative to other forms of debt.
• bombcar 4y ago
  I wonder how much of this is in reaction to people doing chargebacks on transfers to failed crypto exchanges (which apparently people have been doing) ...
• mfDjB 4y ago
  No matter what country I am in and whether they had consumer affairs ombudsmen, filing a chargeback dispute with the merchant (in my case Visa) was the best protection I ever got from dodgy vendors charging me after I cancel a subscription or fail to provide the agreed upon services. Even the hint that I am going to do it usually gets the vendors to act and quickly. I hope that this doesn't go away.
• kylehotchkiss 4y ago
  Where's our right to get out of unwanted subscriptions more easily? They're disputed because that's the easiest way out sometimes! Marking the dispute as "leave existing charge, deny future charges" would be more consumer friendly.
• Cieplak 4y ago
  Perhaps this explains the rise in American Express's stock price today. Amex has perhaps the best customer service I've experienced (maybe that says more about me than them :). While Visa is a card network, Amex is both a network and an issuer. Visa works with issuing banks like Chase, so as a Visa cardholder, you would interface with the bank rather than with Visa when reporting an unrecognized charge. Given that Amex is an issuer, I could imagine that there might exist more incentives to side with the cardholder versus a merchant for disputes, as compared with a company that operates as a network but not directly as a card issuer.
  • hnburnsy 4y ago
    I was flabbergasted recently when I went to cancel an existing Amex card and was able to do it 100% online. I suspect it was because I still have another card with Amex, and I'd bet that canceling it won't be as easy, but regardless kudos to Amex.
• thathndude 4y ago
  One thing that people need to be aware of, is that Visa does not get to set all of the rules for chargebacks and disputes. You have dispute/chargeback rights that are secured by federal law. They are not as comprehensive as Visa, but in some ways they can be stronger. The problem is there are very few attorneys who practice in this area. I know, because I’m one of them. But some of these protections have Real teeth. For example, I recently had a client who had his crypto.com account hacked. That account was tied to his checking account. The hackers debited his checking account, by buying bitcoin, and then transfer it out the bitcoin. My client disputed the charges, and the bank denied all of his disputes. This was all in the context of a well documented breach of a major telecom company. He had all of the substantiation. It was clear that the bitcoin had gone into a very large wallet for purposes of fraud. Despite all of this, he was denied his dispute. Long story short, we got his $10,000 back, got him another $5000, and the bank pay my fees. That was all based on federal law, not visa dispute rules. So the good news is that these changes do nothing to diminish those lasting rights under the law. But it should put this issue on your radar. If they are starting here, it won’t be long until they start lobbying Congress to soften the protections in law as well
  • puffoflogic 4y ago
    Perhaps you could put some useful information in this anecdote by telling us what keywords we would need to give to a bar referral service to get a lawyer with your particular expertise?
    • thathndude 4y ago
      The problem is that this area is so small that most people don’t bother with the niche. However I don’t wanna be completely unhelpful, so I would encourage anyone who’s looking to look for someone who has experience with “FCRA” cases. That’s a really big niche And should turn up lots of attorneys, but there are some similarities between that type of practice and this other type of consumer protection practice. So even if they don’t have direct experience, they should still be comfortable in that realm.
  • Aspos 4y ago
• dazbradbury 4y ago
  Firstly, I assume this only impacts chargebacks that come under the "fraud" category. Where a consumer just tells their card issuer "it wasn't me", but in fact it was them. Ok great... The chargeback "defence" or "arbitration" system for both parties is a joke, that's the real problem that is being glossed over here. And that includes systems with decent UX (eg. stripe). As a merchant, if a user puts in a fraudulent chargeback, you can currently defend it with all the evidence / proof in the world - and the card issuer can still process the chargeback. The incentives are aligned for them to do that in fact. As a consumer, chargebacks are an incredibly important mechanism. But equally the evidence you provide is normally just for the card provider. That information is never passed onto the merchant, just the high level "category" of the chargeback. The merchant has to guess at what actually went wrong, or reach out to the customer and ask them to provide all the same information over again. If a user made a genuine mistake (eg. Didn't recognise the transaction), there is no "cancel" button. There is a whole convoluted process for withdrawing a chargeback. The saving grace for consumers is that card issuers just tend to side with the end-user. The merchant is left clueless as to what the user's real issue was. But the unspoken downside is that these cases end up in small claims courts, that are a drag on the court system, and potentially end up with the end user having a court judgement against them because they provided some misleading information and didn't realise the consequences. There has to be a better system - I'm just not sure this change is it. It just shifts the category of fraudulent chargebacks to a different one.
• mherdeg 4y ago
  McDonald's didn't have the item I ordered for my kids and wouldn't give me a replacement or a refund. I logged a support request asking for a refund. The franchise owner called me and said since the order came from the McDonald's mobile app he is unable to refund me --- he said, please file a chargeback instead. This was under $5 and was auto approved by Chase as a courtesy credit but I wonder if, in the future, the fact that I've used the card in the McDonald's mobile app in the past means it would be auto denied?
• plantain 4y ago
  As a subscription vendor, I can tell you I have never found or achieved the level of evidence required to successfully dispute a chargeback. I don't even bother anymore. This seems like a welcome change of attitude.
• hn_throwaway_99 4y ago
  Was hoping that they would address one big contributor to friendly fraud, which is that credit card descriptions are so ridiculously inscrutable that a cottage industry of fintech startups has emerged just to translate these ridiculous codes into something a human can understand. I mean, I think we've all dealt with the "WTF is SQ *SMTHNSMTHN on my credit card statement?" issue. If credit cards just showed actual merchant names it would reduce a lot of these problems. Granted, there are some issues with privacy (e.g. most companies know you don't want to see "Butt Plug Emporium" on your CC statement so instead show "A Plus Billing"), but even then I think that issue is solvable.
  • thathndude 4y ago
    I had this experience recently. Had a $1000 charge for “AE.com.” Go to AE.com and it’s American eagle. I didn’t spend $1,000 at AE. I was all ready to dispute, but then checked my Apple wallet, and I saw the charge at Allen Edmonds. Yeah Allen Edmonds truncates it’s online orders to “ae.com”
    • kstrauser 4y ago
      Honestly, then Allen Edmonds has no one to blame but themselves. That’s insane.
      • thathndude 4y ago
        I really get into disputes. It’s an occupational hazard. So I was putting together a whole presentation with a video of AE.com loading, ICANN data, and the whole sink, to send to Amex. But, just as I am about to start the dispute process, I checked a couple more places and solve the mystery. Someone might be reading this and think “you couldn’t remember where you spent $1000 just a week ago“. But I was genuinely flummoxed. I’m sure some psychologist can explain it, but if you had just asked me where I spent $1000, I probably would have remembered. What threw me was the “ae.com” representation. It wasn’t so much that I forgot where I spend money, but a certainty that I did not spend money at AE.com. But I really should reach out to Alan Edmonds and tell them to fix this. They don’t even say “ae.com shoes” literally the entire description was “ae.com”
• onionisafruit 4y ago
  I'm not familiar with this domain. Why is this called "friendly fraud"?
• lukesmith82 4y ago
  As someone with an online business, I welcome this. 99% of the chargebacks we see are first party fraud. We lose these disputes even after providing evidence. We've found and submitted Instagram posts of the customer wearing the item they claim to have "not ordered" or "never received". We've had customers communicate with us how much they "love" the item after receiving it, only to file a first party fraud related chargeback months later. No matter what evidence we provide, they always side with the customer. I don't know what world people are living in, but as a business we have never won a chargeback dispute.
  • metadat 4y ago
    If you are being honest, why are you posting this using a brand new / throwaway account?
    • mlyle 4y ago
      > If you are being honest, why are you posting this using a throwaway account? Maybe he's new? edit: I see you edited your phrasing to make it nicer, but... It looks like the dude posted under his real name (with a handle that he uses many other places).
      • metadat 4y ago
        An odd time to finally decide to join HN. With no account history, how can the community distinguish between legitimate discourse and shills for a controversial big business agenda story like this? This is the kind of story that gets picked up by HN first and then ends up published in mainstream media the following week. Anyhow, I don't defend cardholder fraud, and at the same time I've been ripped off too many times by merchants. They tend to err on the side of themselves, perpetually fleecing masses of real-life flesh and blood human beings. @mlyle: I appreciate you taking the time to dig into it more and raise the controversy to my attention. This is a helpful way to be, you are great.
        • mlyle 4y ago
• NonNefarious 4y ago
  "At Visa, our goal is to reduce all types of fraud in the ecosystem" Bullshit. If that were true, card providers in the USA would be using chip-&-PIN the way the rest of the world has been for 10 years or more. We finally JUST got cards with chips in them... which are largely neutered by the idiotic continued use of SIGNATURES (or nothing).
• petilon 4y ago
  I have been hit many times with unintended auto-renewal. The merchant hides a clause in terms & conditions that the subscription will be auto-renewed upon expiration, then at the end of the year, wham! you get hit with an unexpected charge. Then you have to call the merchant to cancel, be on hold for 30+ minutes, the whole rigmarole. What is Visa doing to protect the consumer in this case? Auto-renewals should always be explicitly opted-in by the cardholder.
• dataflow 4y ago
  > This includes customers refuting valid purchases such as long-forgotten recurring subscriptions, or children given access to use their parent’s card to make purchases with parental approval. > Those ramifications for merchants include losses that can be up to double the original transaction amount Is there a better argument for this that they're failing to make here? Because if I take this at face value, I feel like if your business is racking up so many of these charges that it's affecting its bottom line, maybe it suggests your business is itself the problem? Why is your business surprising customers with charges if it's actually providing them with something of value? Doesn't it sound like your business relies on tricking people into forgetting to cancel subscriptions in that case?
• nickjj 4y ago
  From the article: > Those ramifications for merchants include losses that can be up to double the original transaction amount and increase a merchant’s chargeback ratio, which can impact their business and their bottom line. I wish it were only double. On a $50 digtal purchase, Stripe will charge you $1.75 in transaction fees but losing a dispute costs you the $1.75 in addition to a +$15 dispute fee that Stripe charges. Even if you can prove that the customer used your product with tons of usage logs and you even have a log of emails where the customer is asking questions that can only be asked if they used your product chances are you'll lose the dispute because most card vendors want to keep customers happy even if it means screwing a small business.
  • dazbradbury 4y ago
    Note that other card processors don't charge the $15 fee. Stripe is a bit different as they are set up as the merchant (rather than the business) so chargebacks hurt them more than the standard merchant / card processor arrangement. Fully agree with your final sentence though, some card processors rule against the merchant regardless of evidence supplied. It makes the whole process pointless. It's actually simpler to take a customer to small claims court than defend a chargeback, and at least the court will look at the evidence. Such a waste of resources, sadly.
• oliwarner 4y ago
  Troubling to see Visa lumping a lot of behaviours together, and suggesting it the only legitimate use for chargebacks are second or third party fraud. Merchants don't just have to deliver, they have to service their customers according to contract and consumer law. If something breaks or is otherwise faulty and the merchant blanks you, a chargeback is the correct next step. Nothing seizes attention like money being pulled out of your account. There absolutely is fraud, and hats off to Visa noticing that mere trillions of dollars later, but they shouldn't allow merchants to skate by on proof of physical delivery.
• joshstrange 4y ago
  > “Reducing the impacts of first party misuse on small businesses requires industry-wide support,” says Julie Fergerson, CEO at MRC Yes, please Mrs CEO, tell me more about small businesses... I think I hurt myself rolling my eyes at this. This will primarily used by larger companies to fight legitimate chargebacks. If they had a reason to dispute the chargeback there are already means to do it, this process already exists. I can't imagine this new "program" is anything more than a way to screw consumers more.
  • lukesmith82 4y ago
    As a small business owner that deals with chargebacks, we never win these disputes - even when providing the evidence. How is that okay?
    • Someone1234 4y ago
      Visa created the cost of a chargeback AND the process, why not take it up with them? They've swung from one extreme to the other, that's not an improvement.
      • lukesmith82 4y ago
        By extreme, you mean that a business doesn't have to bear the cost of a fraudulent chargeback if they can prove it? What is extreme about that?
        • Someone1234 4y ago
          Visa are the ones framing this as "fraud." Personally I view a business placing a cardholder in a position where they NEED to do a chargeback as anti-consumer. The chargeback process needs to evolve wherein consumers actually abusing it lose, and businesses abusing consumers lose. Regardless it shouldn't cost a business anything if they WIN. There are numerous stories in this thread alone about businesses continuing to charge people after cancellation and other good-faith interventions. Visa as essentially saying they won't help in those cases since the business can prove a pre-existing relationship. That's not ok. Heck, maybe we need a kind of "unsubscribe" mechanism from Visa's side. Something that isn't a chargeback (which they'd reserve for actual fraud) but a mechanism where a vendor just cannot charge that card anymore without getting a NEW agreement/contract.
• gsibble 4y ago
  Guess I'm only using my Amex from now on.
• caf 4y ago
  This includes customers refuting valid purchases such as long-forgotten recurring subscriptions... You said the quiet part out loud here, VISA. If their subscription has gone unused so long that they've forgotten about it, it's pretty clear they wouldn't keep paying for it if they knew. There's certainly no intention to defraud here on the part of the customer, if they've forgotten about it - arguably, if the merchant should reasonably know that the customer has forgotten about the subscription, they're the one acting at least unethically (consider "has not logged into the service for 2 years"). You could drastically reduce the number of these particular disputes by requiring recurring subscriptions to be actively acknowledged by the customer eg. every 12 months.
  • amf12 4y ago
    I am going to go against the grain here. Disclaimer: I think these changes are shitty for a variety of different reasons. I think it is okay for Visa to come up with a policy which disallows disputing a long unused subscription. User subscribed to the subscription, forgot about it, did not check their card statement for a while to know that they were being charged for it and then asked for a chargeback (presumably because the merchant denied them a refund). This is not Visa's problem. One scenario where Visa should still allow chargebacks - a user tried to cancel the subscription, have proof they tried to, but the merchant is still charging them. Now, should the merchant auto-cancel unused subscription? Hell, yeah. But, we should not blame Visa for coming up with a policy that does not allow such chargebacks.
    • caf 4y ago
      I don't think people should be using chargebacks for this case. But I also think VISA is in a position to be putting some requirements on the merchants as well as the customers here - particularly if it can prevent the dispute from being filed in the first place.
• perfectstorm 4y ago
  > When most people think of fraud, they think of stolen account numbers or identity theft, but first party misuse, which can account for up to 75 percent of all chargebacks1, is when a cardholder disputes a legitimate purchase that they intended with their issuer. This includes customers refuting valid purchases such as long-forgotten recurring subscriptions, or children given access to use their parent’s card to make purchases with parental approval. sounds like BS. if it's because a child made the purchase or they forgot to cancel subscription, why don't they deny the claim? it's not like every dispute claim has to approved. this is akin to Visa and other credit card providers removing price match policy for purchases (up to n days from purchase date). one of the issuers said they are removing it because no one uses them. BS. if no one uses them, why not keep it for 1% of users who benefit from it?
• mchusma 4y ago
  This is an amazing change! Almost all credit card disputes I have seen are this category. This is a huge win for merchants and keep people honest.
• anonymousDan 4y ago
  Do chargebacks affect your credit record in anyway?
• xtiansimon 4y ago
  > “With this change, if merchants can provide additional data or evidence to show that the disputed charge is valid, then the dispute will be invalid.” ?? What? The credit card systems today don’t produce much evidence—what are they referring to here? We had 100 BigMacs before the charge and afterwards we had 99?!? Are they rescinding the “liability shift” rule? https://squareup.com/us/en/townsquare/liability-shift https://squareup.com/us/en/townsquare/liability-shift
• vivegi 4y ago
  First, the term "friendly fraud" sounds terrible; First-party fraud at least conveys the meaning clearly without the marketing dressup. Second, how does this not weaken the rights of the card-holder? > This change will empower merchants to protect themselves against first party misuse by enabling them to submit additional evidence that a purchase was indeed legitimate and authorized by the cardholder in order to stop the dispute claim. Additional examples that can help identify that a purchase is legitimate include a customer using the same payment credential previously at the merchant, login credentials, proof of use of a product and more. So, for the 80% of the cases (based on Visa's own data citation in the article) where there was a legitimate chargeback, the third-party perpetrator of the fraud just has to use the product which perhaps shows up as "evidence" to the merchant that could be used to deny the chargeback. This somehow reeks of nonsense and is just a weakening of the cardholder's rights and protection of their credit/reputation.
• benrapscallion 4y ago
  All the more reason to use my Apple Card (MasterCard-issued).