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#2223550 - 10/10/19 06:31 PM Reg E - Online scammers
stonec Offline
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Joined: Nov 2018
Posts: 24
We have a client whose dispute regards being scammed online for a computer service. The company contacted him stating that something was wrong with his computer or offering some sort of special service. Our client accepted the service and willingly provided his debit card number; some sort of service (we are not sure what) was performed on his machine and software may have been installed on the device.

Afterward, he determined it may be a scam, had his card hot carded and proceeded with a dispute. He had taken his computer to Staples and they claimed that his device was compromised and informed him that they had undone whatever service the providers had performed. He disputed as product/service not as advertised (not under our definition of unauthorized transaction).

We have recently been advised that we should process the dispute as though it was an unauthorized transaction as the debit card number was accessed by the merchant by means of fraud. Is this correct? It seems that it would not be unauthorized since the client did willingly provide payment and a service was performed/product installed.

Furthermore, if we are to submit a chargeback case claiming the transaction is unauthorized, it seems very likely that the merchant in this case will simply provide some sort of evidence that they were given payment credentials, authorized to receive payment and provided service in return. Wouldn't it make more sense to submit a chargeback claim for product or service was not as described if we can receive some sort of statement from Staples regarding what was done to the client's machine and how they fixed it?

We are unsure how to move forward with this dispute. Do we deny the claim, believing that it fits the definition of an authorized transaction? Do we honor the claim and write it up to loss outright or do we want to honor the claim and also try to process a chargeback?

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#2223553 - 10/10/19 07:19 PM Re: Reg E - Online scammers stonec
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,649
Galveston, TX
It was not unauthorized - your Reg E responsibilities are over. You need to only worry about your card issuer rules and whether they cover it or not under their zero liability rules.
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#2223557 - 10/10/19 07:26 PM Re: Reg E - Online scammers stonec
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,207
Illinois
Zero Liability covers lost, stolen and compromised cards so there that does not apply either. If we submit the chargeback as 'unauthorized' all the merchant has to do is provide proof that the customer provided the information and we lose the claim.

Submitted as "Services not received" makes the merchant prove that they actually fixed the computer (which they likely won't be able to do.)

V/MC do require that we attempt to assist the cardholder (to protect the brand integrity) assuming they satisfy the requirements of the chargeback. (e.g. merchant contact, a detailed description of what was promised vs. what was delivered, etc.) The Bank should not take a loss as there is no Reg E protections, but we are required under our V/MC contract to try and recover the funds for our customer.

These are the exact type of questions I'm tackling next week.

VISA and Reg E Error Resolution

Mastercard and Reg E Error Resolution
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#2223710 - 10/15/19 04:04 PM Re: Reg E - Online scammers BrianC
P*Q Offline

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P*Q
Joined: May 2001
Posts: 8,450
Somewhere
Originally Posted by BrianC

V/MC do require that we attempt to assist the cardholder (to protect the brand integrity)
Dreams of the day customer stupidity comes into play for liability. Pipe dream, I know. A person can wish though.

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#2223727 - 10/15/19 05:56 PM Re: Reg E - Online scammers P*Q
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,417
Pulling people out of the ditc...
Originally Posted by P*Q

Dreams of the day customer stupidity comes into play for liability. Pipe dream, I know. A person can wish though.


i approve this dream!
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