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#1532112 - 04/06/11 04:20 PM Reg E
CARM9 Offline
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Joined: Feb 2011
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When a client has an authorized checkcard debit on their account and then several months later several charges from companies affiliated with the original company come through the account is this Reg E or merchant dispute?

Scenario is: A client subscribed for a $9.99 purchase in January and imbedded in the agreement, unknowingly agreed to sign up with other third parties. These other charges begin to show up on their account several months later. Since the client has not benefited from any of these purchases wouldn't they be treated as unauthorized?

Would these be a merchant dispute since the client unknowingly signed up for the service and has not benefited from the transcations? Or treated as Reg E as the client asserts charges are not authorized and are multiple transactions from different parties.

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#1532139 - 04/06/11 04:47 PM Re: Reg E CARM9
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
The client always has the right to assert a Reg E claim of transactions being unauthorized. Based on your description of the terms and conditions of the site, it appears you have already opened a Reg E investigation. The customer's failure to review the terms they were agreeing to is not the bank's problem. The transactions are authorized. Send the customer the customer a denial letter and include the terms and conditions as documentation for how you based your decision to deny their Reg E claim.

If, in your opinion, the customer has sufficient cause to pursue a merchant dispute, remember that VISA/MC requires they first attempt to resolve the dispute with the merchant and must include a desciption of these efforts in a dispute letter.
Remember there's a difference between "not benefiting from a transaction because the merchant didn't provide service" and "not benefitting from a transaction because the customer failed to use the service."

V/MC would cover the first statement, but not the second as this is simply buyer's remorse. You could try either "Services not rendered" or "Not as Described" for your chargeback reason depending on what the customer's letter says.
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#1532149 - 04/06/11 04:54 PM Re: Reg E BrianC
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
If the authorization was included in the original purchase disclosure, it appears to have been authorized. If it was authorized, the dispute is between the customer and the company; it does not involve the bank.
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#1532402 - 04/06/11 07:30 PM Re: Reg E CARM9
CARM9 Offline
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Joined: Feb 2011
Posts: 112
Can you provide insight to these other scenarios:

1. Scenario: A client purchased a dozen donuts at DD for $6.99 (Actual price ). They were subsequently charged several other instances for purchases made the same day. Both card present and card not present (CNP).

Are these multiple entries to the account Reg E multiple postings or Reg E fraud.

2. Scenario: A client paid $29.99 for DirecTV service, and was then subsequently charged within the same month for an additional $89.62 and $62.85. The client states they only authorized $29.99 and does not know what the additional charges are for. Both CNP, no merchant contact made by client.

Are these multiple entries to the account Reg E or merchant disputes?


3. Scenario: Client has paid 12th of 12 installments @ $219.62 and reports being charged an additional $219.62 (or for the purposes of this discussion, another random amount). The client states they did not authorized that debit. No merchant contact made by the client.

Are these multiple entries to the account Reg E or merchant disputes?

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#1532580 - 04/06/11 10:21 PM Re: Reg E CARM9
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
1. This is a Reg E claim. Unfortunately sometime unscrupulous employees will run a card multiple times and then line their pockets with the extra purchases. What makes these transactions frustrating is they are often small dollar amounts and not worth charging back due to processing costs. Also many fast food restaurants have chargeback protection under amounts as provided by V/MC operating rules so you can't even investigate whether or not the customer is being untruthful.

2. This is a both/and. It is a Reg E dispute because the customer states that the transaction amounts exceed the $29.99 authorized, but it is also a merchant dispute becuase they have had contact with the merchant.
For you investigation you have two choices. (The Reg E clock is ticking) Either (a) request the customer attempt to resolve the dispute with DirecTv and write a dispute letter if this is not successful so that you can file a chargeback or (b) since under Reg E you cannot require a customer letter, file a retrieval request for the diputed transactions so that DirecTv will provide what authorization was given for the additional charges.

3. This is also a both/and. Reg E says that the customer can dispute the transaction. V/MC require that the customer try to resolve with the merchant first before allowing a chargeback. Your options are the same as in #2 above.

Also in both cases you can always try to make direct contact with the merchant to bypass the chargeback process and see if they can help clarify the transactions. They may or may not be willing to work with you, but you may be able to resolve the dispute more quickly.
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