Accepting credit cards: chargebacks and liability

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Mountain Goat
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Accepting credit cards: chargebacks and liability

Post by Mountain Goat »

We accept MasterCard/Visa and Amex for rental charges - both accounts are shared with another business we run - both businesses generate relatively high-value 99% Customer Not Present charges, everything based in the UK.

We had a short-notice fishy customer this week, and I tried to pin down liability on chargebacks and bounced payments with Visa. Their answer was plain and simple: neither Visa nor the card issuer will accept any liability for bounced payments and chargebacks (no time limit), however carefully we follow their procedures.

i.e. last-minute punter pays with stolen credit card, stays with us, leaves, we refund deposit, real card owner arises from coma or extended hangover, payment bounces, we lose, banks just laugh.

We say that we only accept c'card payments where 'delivery' address is the same as billing address. That offers some protection against UK-based fraudsters via our PDQ machine with a double-check on street number and post-code, plus the 3-digit security code. In fact, we're reasonably OK with this, although (see above) c'card company will still bounce fraudulent charges.

However, with crooks plying their trade from abroad, there is no street number/zip code facility on our PDQ and not all card issuers are using the 3-digit security code on the signature strip.

So 100% our responsibility. Visa have got a foreign Name/Address double-check hot-line telephone facility (extracted after several rants and escalating our enquiry, and hotly denied by front-line customer service) at £4-50 a shot (but PDQ does this for UK clients). Better than nothing, and combined with asking punter to fax a copy of their credit card bill could be some sort of solution.

Amex is on another planet and not got the strength to ask them - because of their charges we steer payments to Visa/MC.

PayPal in my opinion has no protection, but this has been discussed at length somewhere else, as has the credit card procedure I think, so apologies - it hadn't sunk in with us.

Any other experiences with procedures and security?

MG
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Ju
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Post by Ju »

Not something that had occured to me. Once we take a payment by card it hits our account the next day. Surely once it is in our account it is our money and the card companies can't get it back.

We don't do checks on account address and billing address. We don't accept amex as the charges are too high.

Ju
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Mountain Goat
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Post by Mountain Goat »

Ju,

Not with our deal, and we get the loot same day. I assume agreements must vary. A call to relevant Customer Service would give you the answer.

Surely once it is in our account it is our money - not so with banks either (see other threads).

MG
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tree-peony
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Post by tree-peony »

MG, my experience is exactly the same as yours. We're snookered either way and they take no responsibility whatsoever! We have an on-line payment gateway hosted by NatWest (it's not for holiday rentals, but an online shop I also run) and had an order from Nigeria a while ago for £170, well above the normal amount. I phoned Worldpay and queried it. Their advice was to refund the transaction. Now it was obviously fraudulent, but refunding incurrs a transaction charge! The alternative was to wait and see if a chargeback happened, which also incurrs a charge.....win win to the banks AGAIN.
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Mountain Goat
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Post by Mountain Goat »

TP, that's interesting. Actually, I wouldn't take an order from Nigeria for anything, and for the mail-order side, we can't get insurance anyway.

I was wrong about our Visa credits - they take a couple of days to get into our account - they're not instant.

I was inspired to call Amex. We don't have a PDQ terminal for them (or whatever it's called), it's all done by phone, but they offer a 'free' delivery/billing address check - no liability on their part, same as Visa/MC, so the decision to accept is over to us. Their charges (for us) are high, as we don't put much through, and they take 10 days to credit our bank.

MG
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tree-peony
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Post by tree-peony »

well neither did I intentionally! You can't "block" specific countries tho, so as the shop is all automated, the order went through. I didn't send the goods tho! Incidentally, they can do chargebacks up to 6 months after the transaction and just take the money from your account :|
ttp
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Post by ttp »

Ju wrote:Not something that had occured to me. Once we take a payment by card it hits our account the next day. Surely once it is in our account it is our money and the card companies can't get it back.
Ju
Check your merchant agreement.

Normally they can get it back anytime during the 6 months following the transaction.
Regards

Nick Thompson

http://www.gite-in-brittany.co.uk
ttp
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Post by ttp »

Mountain Goat wrote:I was inspired to call Amex. We don't have a PDQ terminal for them (or whatever it's called),MG
You should be able to get your terminal set up to accept AmEx.

It's worth discussing charges with AmEx, we managed to get their % to below VISA/MC.
Regards

Nick Thompson

http://www.gite-in-brittany.co.uk
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