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Don't ask for a refund, go to your bank or CC company and charge back the 6 months. That'll hit them where it hurts. Little known fact about chargebacks: the me

• tehwebguy 14y ago
  I cannot stress this enough. If the company continues to receive chargebacks claiming fraudulent charges (which this really does appear to be) they will find themselves in a difficult place with card processors. Some processors drop clients if they crack 0.5% a chargeback rate.
  • lopatin 14y ago
    I have no idea how complicated this is, but with 76 million in funding, what are the chances they found a way to process credit cards them selves?
    • tisme 14y ago
      Zero. The credit card processing chain is quite complicated, with banks, card companies, ISPSs, processors and merchants all having fairly clearly delineated roles. A merchant - no matter how big - implementing the whole chain is unheard of. Visa, MC and other cc companies care a lot more about their reputation than they'll even care about a company like this. Much larger fish have been put on the bbq over less substantiated claims of fraud.
      • sylvinus 14y ago
        Hasn't Amazon implemented their own?
        • tisme 14y ago
          Do you have an amazon credit card? As far as I know they use GE as the issuing bank, they may have other deals in place. As far as I know - but this may very well be wrong or at least out of date - amazon does not have a banking license and the network used is VISA. This seems to confirm that: http://www.cardhub.com/d/amazon-credit-card-1015c/ http://www.cardhub.com/d/amazon-credit-card-1015c/
          • paulsilver 14y ago
            I've got an Amazon credit card (in the UK) and it's a Mastercard run by MBNA. I would guess Amazon have looked at replacing as much of the payment chain as they can and done the parts that are profitable to replace. But they have a long way to go before the enormous hassle of becoming a bank is going to be attractive and possible.
    • PeterisP 14y ago
      It's not nearly enough. Some major conglomerates (If I recall correctly then GE, GM, Samsung and others) do stuff like that in-house by creating bank-subsidiaries in their largest markets, but I'd guess that it would be reasonable at 78 billion revenue, not 78 million.
      • fffggg 14y ago
        That's just to become an acquiring bank, to save on exchange fees. Ultimately VISA determines who gets to participate in the VISA credit exchange network and will fine acquiring banks who participate in things like this. No one can force their way in and avoid responsibility -- period.
      • tisme 14y ago
        And even then that's not the whole chain. After all, a GE capital card is backed by another card company: http://www.gemoney.com.au/en/credit_cards/index.html http://www.gemoney.com.au/en/credit_cards/index.html Piss off VISA/MC/JCB/AMEX and you're in trouble.
• brazzy 14y ago
  Even worse are scams that look like a free service (doing stuff like horoscopes) but require you to enter an address and then send you a bill for a 12 month subscription, and threatening legal action if you don't - quite common here in Germany. There's actually new legislation since July that requires all online transactions to explicitly say there's a fee right on the confirmation button, otherwise they're not legally binding.
• borlak 14y ago
  Also, if 1-2% of your charges through a merchant result in a chargeback, the merchant will drop you completely. However, a good scam company will have a few merchants lined up just for this reason.
  • tisme 14y ago
    > the merchant will drop you completely You mean processor/bank/merchant account, not merchant. In the parlance of the payment industry justfab is the merchant in this story. And yes, there are scammers that have processors / banks lined up but they burn through them at a rate of about 1 every 8 weeks or so, and each time that happens they forfeit a large amount of cash. There are not that many merchants willing to play the game that way. 50 chargebacks or 0.5%, whatever gets hit first and you're in trouble. Reputation damage to the CC companies and you're out for good. Merchant account hopping is not a long term viable strategy.
• pbj 14y ago
  This is the best suggestion, but unfortunately may not be possible for them to recover everything depending on how they paid/their credit card company. Most banks only allow you to do a chargeback for charges within the last 1-2 months on debit purchases and 6 months on credit card purchases.
  • antidoh 14y ago
    Do the 1-2 month chargeback, and then when you've got that, take the company to small claims court. The chargeback may bring you extra weight (or not, IANAL).
• encoderer 14y ago
  Another little known fact about chargebacks: You lose some of your rights if you pay charges before disputing them. Try it, absolutely still try it, and good luck!
  • tisme 14y ago
    That's nonsense. The only time a chargeback makes sense is after the payment has already gone through.
    • niggler 14y ago
      What the parent meant was "after you paid the bill". It's hard to go back later and say the charge was fraudulent after you received the bill and opted to pay it. In theory, payment = acceptance of charges.
      • tisme 14y ago
        Theory doesn't matter much here. Especially not with automated debiting of checking accounts to pay the balance or some amount of interest or a combination of those. As a customer of the card company you have the right to dispute charges as far back as you want, whether they'll honor that or not is a different question but typically up to 6 months in a card-not-present situation should give you no problem at all. And once the complaints about this company start rolling in it will get even easier. Mass chargebacks are a very powerful weapon in the hands of organized consumers.
      • ceejayoz 14y ago
        > It's hard to go back later and say the charge was fraudulent after you received the bill and opted to pay it. Not when it's lumped into a single balance that you pay significant monthly interest on.
    • deleted 14y ago
      [deleted]
    • jhferris3 14y ago
      He means after you've paid your credit card bill with the included charges on it.
• mseebach 14y ago
  Don't forget that doing a chargeback doesn't absolve you from having to pay for services you've legitimately signed up for, it just denies the parties the convenience of settling through the credit card companies. They can take you to court for breach of contract, and if (IANAL) the subscription contract is found to be legit, you have to pay + fees.
  • tisme 14y ago
    That is true in theory, but in practice, especially in situations like this that does not happen. For that there would have to be a much more transparent sign up process and actual delivery. Non-performance is not a good basis to start a law suit, especially if you're on the non-performing side.
    • mseebach 14y ago
      I agree, but the GP made it sound like a get-out-of-jail-free card.
      • tisme 14y ago
        Well, it's sad in a way but there are consumers that use it exactly like that. They order stuff and then charge back the money in the hope that the merchant won't care enough to fight the chargeback, which can cost a multiple of the original transaction. Most large merchants have risk mitigation strategies that attempt to detect this before a charge gets processed and goods are shipped but that's a less-than-perfect mechanism.
  • Confusion 14y ago
    They'll argue you checked the checkbox. You'll argue you didn't. It's their word against yours and they will lose, because they can't prove you actually checked the checkbox.
    • mseebach 14y ago
      First: You're in court. That's a whole lot more than you bargained for. Second: Are you a lawyer? Is that the guaranteed outcome of such cases? Will it really carry no weight that they can (probably) substantiate their claim that you checked the box with a technically sound argument that their website actually works? A manual release test plan, unit tests, cucumber scripts? That one, single checkbox, and the fact that you have to manually check it, is the legality upon which the entire business hinges. Especially if they're a little shady, they'd be sure to have their stuff in order around this.
• keammo1 14y ago
  I definitely second this. I used to work a children's website, where kids would often take their parents' credit card and make purchases, and we'd inevitably end up with many chargebacks (even though we offered refunds, many people went straight for the chargeback option instead of contacting us). The chargebacks not only cost the company extra - even if the company wins the dispute - and if chargebacks happen too frequently, banks may shut down the account. I have also won 3 chargebacks against companies who never delivered their product or used deceptive practices. The process was not too difficult, and I believe the CC companies tend to side with the consumer. Verdicts on the disputes can take several months to process though.
  • tisme 14y ago
    That's pretty accurate. As far as the verdicts are concerned, yes, they can take a while to process but if a company gets a negative reputation the process tends to be expedited considerably.
• kylebrown 14y ago
  Banks and, at least VISA, are not as quick to do chargebacks they used to be. Now, they'll only do them if the customer says their card was stolen. Found this out when my mother was scammed by a moving company for the 50% deposit (company never showed). She called the number on the back of the card to dispute the charges (I believe its the bank's customer service number, not VISA's). But the bank told her they couldn't reverse the charges since she was the one who authorized them. To get her money back, she'll have to take the moving company to small claims court.
  • d2ncal 14y ago
    I have used AMEX since the last 9 years, precisely for things like these. They are REALLY good at processing disputes and chargebacks, and in the last 9 years, there has never been a time when I 'lost' a claim against such fraudulent charges (I've had around 5 such claims). On the other hand, both Visa and Mastercard are pretty much useless to 'protect' you against charges like these.
  • tisme 14y ago
    There is a huge difference between a card present, authorized charge and a card-not-present unauthorized rebill.
  • lmm 14y ago
    Debit cards (which from the way you're talking about a bank it sounds like this was) are like that. It's why your best practice is to always use a credit card when buying things (it's not like it costs you anything, as long as you have the discipline to not run up a bill you can't pay). (disclaimer: I'm not from the US)
• deleted 14y ago
  [deleted]
• tzs 14y ago
  However, be careful and only do a chargeback when you are sure you never want to deal with that merchant again. Many will blacklist you if you do a chargeback, because of that high chargeback fee (which they have to pay even if they have sufficient documentation to successfully fight the chargeback). I'm kind of surprised no one has started a service for merchants to warn them of chargeback prone customers (there are people who go straight for the chargeback without even trying for a refund first).
  • tisme 14y ago
    > I'm kind of surprised no one has started a service for merchants to warn them of chargeback prone customers (there are people who go straight for the chargeback without even trying for a refund first). There are plenty of such services. You don't see them because they don't normally operate on the merchant level, they operate on the IPSP / processor / card company level. The reason why they don't usually operate on the merchant level is because that would allow a merchant to pollute the pool with their 'known good' cards to stop people from buying a product with competitors. You have to wonder when you buy this information as a merchant whether it is clean or not. But when an IPSP / processor or card company uses their aggregate knowledge then it starts to be really useful. You can do AVR checks and so on all by yourself as a merchant but most if not all reputable IPSPs will have an anti-fraud system in place that does all kinds of checks.
  • dangrossman 14y ago
    Look into MaxMind MinFraud. In addition to providing a 'risk score' for your online orders, it's also a kind of collective blacklist like you described. Any MaxMind customer can report an IP or e-mail address as associated with a fraudulent order, and any other MaxMind customer who recently scored an order with the same IP or e-mail gets a warning about the increased risk.
  • omarchowdhury 14y ago
    There was one, it was called BadCustomer. I don't think it's around any longer, since the people running were running shady rebill scams like Fab.
  • 14y ago