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.
> For example, you used to be able to discharge student loans in bankruptcy.
IMO, a non-dischargeable loan should have a 0% interest rate by law. All banks would get is an origination fee, capped by statute to some low amount (say, 1% of the principal).
I'd be in favor of this being applied retroactively, so that all interest paid on non-dischargeable student loans in the past was applied to the principal and any overages refunded to the borrower (perhaps over a period of time or against taxes owed or similar).
I'd prefer both of these to be done instead of a one-time "student loan forgiveness" program.
I’m totally opposed to predatory student loans, but your point seems kinda light on logic. If the number of student loans being discharged was “infinitesimally small” and we can assume prohibiting bankruptcy drove the number of delinquent loans down even lower, why are student loan repayments considered a huge issue?
> 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.
It sure doesn't look that way from my end.
I maintain the payment processing stuff for a small seller of digital goods and services. The services need to regular contact our servers in order to perform their service, and in that contact they identify which customer is using them.
If a customer cancels and asks for a refund we always give the refund. If they are more than around 20% into the term of their service and our logs show that they have been using it we might prorate the refund, but usually we just give a full refund.
No hoops. They can cancel and request a refund by calling support or do it entirely online without any need to interact with a human.
The only people who might have a good reason for a chargeback are people whose credit cards were stolen and the thieves purchased something from us to check if the card was valid. We almost never see such chargebacks.
Almost all the chargebacks are people who tell their bank that they don't recognize the charge but they have actually been using the service actively for years. Some are on monthly subscriptions and so have had dozens of charges from us before and now suddenly have no idea who we are.
Heck, a fair number of these people even have had their subscriptions stop because their on-file card was no longer valid, came to their account page at our side and updated their payment info to reactivate their subscription, and then the next time it is time for renewal they are calling their bank saying they never heard of us.
I don't think we have ever been able to convince the bank or card companies to deny any of these chargebacks. None of the use or transaction history matters. They just tell us to FAX them a copy of the customer's signed receipt from the original sale.
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
The problem is in most cases by the time you're talking about involving a lawyer, most consumers have given up the fight. A majority of the fraud cases I've had requiring charge backs have been in the 20-50 dollar range, so not nearly enough to justify legal assistance.
By putting the onus on the legal system it allows merchants to commit smaller scale fraud more easily because normal people don't have lawyers on hand and aren't willing to do so for a $30 case of fraud, as justified as it may be.
> That was all based on federal law, not visa dispute rules
In my experience, insurance adjusters are completely oblivious to the distinction here—that there are your company's rules, and then there's the rule of law, i.e. something bigger than you or your boss or your boss's boss, etc.
Insurance carriers especially benefit greatly from the misconceptions held by those in their workforce (and who end up seeding public perception with the same errors), even when they're pretty easily shown to contradict the law. It's almost certainly intentional.
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?
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.
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.
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.
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
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.
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.
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!).
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/2021/12/15/235295...
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.
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.
Allowing longer description lengths would be a huge improvement! Most chargebacks we see are "didn't recognize transaction", then we explain what the charge was for, and have to go through the chargeback cancellation process (which is a whole ordeal in itself).
On that note... Why can't customers cancel a chargeback as easily as they can create one? The whole system is a UX nightmare for all parties involved.
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”
I can only assume that all of this is backed by some ridiculously old data storage system that has something like a 15-character limit on these names.
And then you have the problem of aggregators like Square (your example), where they have their own prefix, and then apparently do a pretty bad job of making sure their merchants pick reasonable names. And then there are regular merchants who use their company name, which might be wildly different from the name of the store.
I do wonder how much "friendly fraud" is just someone looking at an inscrutable charge description on their statement, having no idea what it is, and disputing it on those grounds, even when it was a valid charge.
Cardholders are supposed to call the merchant first to confirm what the charge is and request a refund. So charging back anything they're not sure because it's easy is not following the payment network rules. However many businesses have half hour hold times ("We are experiencing higher than normal hold times due to the Coronavirus") and take weeks to respond to email if at all. I don't blame people for reflexively clicking dispute charge.
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.
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.
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.
You are giving the businesses and other big actors way too much a benefit of the doubt. These large organizations will outright lie to win disputes.
For example, I am an attorney who practices in the space, and I recently filed a dispute with my credit card. In response to my dispute, which I supported with a sworn affidavit, the retailer responded with a blatant, demonstrable lie. They said I never contacted them. Of course, they messed with the wrong person, and I responded with additional evidence and substantiation. I am confident I will win. But most consumers are not going to be able to execute on a dispute the same way that I did. Most consumers just get screwed by the lie. And that’s under the CURRENT system. So now we’re making it even easier for them to lie and screw over customers. Great
Visa worded this announcement very carefully to give you the impression it's a reasonable change. It's only reasonable for the predatory merchant operators.
Consider the phrasing "first party" instead of "cardholder", to make it less obvious who they're referring to.
Whether or not you think the change is reasonable, something that Visa and other CC processors need to allow is for a consumer to say "I do not want to allow future charges from this merchant", and then to notify the merchant that they will no longer be able to charge that card. This would at least protect against predatory recurring charges.
The merchant can outright lie. I returned a $2k item to Amazon once. Amazon failed to refund, so I filed a dispute. Amazon replied with a 50-page PDF that at the end claimed they didn’t get the item. I then pointed out that not only did UPS deliver it to them in Nevada, but it was Amazon customer support that gave me the tracking number.
This change by Visa is going to be abused by big merchants who have legal teams draft up bullshit blanket responses to scare consumers and then exit pre-arbitration. Since the cost to arbitrate is $400 minimum, it’s difficult for consumers to go through with it.
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.
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.
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.
> 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.
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.
> “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.
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.
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.
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.
> 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?
> “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!
"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).
> 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?
[+] [-] thathndude|3 years ago|reply
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.
[+] [-] erichocean|3 years ago|reply
IMO, a non-dischargeable loan should have a 0% interest rate by law. All banks would get is an origination fee, capped by statute to some low amount (say, 1% of the principal).
I'd be in favor of this being applied retroactively, so that all interest paid on non-dischargeable student loans in the past was applied to the principal and any overages refunded to the borrower (perhaps over a period of time or against taxes owed or similar).
I'd prefer both of these to be done instead of a one-time "student loan forgiveness" program.
[+] [-] ericmcer|3 years ago|reply
[+] [-] tzs|3 years ago|reply
It sure doesn't look that way from my end.
I maintain the payment processing stuff for a small seller of digital goods and services. The services need to regular contact our servers in order to perform their service, and in that contact they identify which customer is using them.
If a customer cancels and asks for a refund we always give the refund. If they are more than around 20% into the term of their service and our logs show that they have been using it we might prorate the refund, but usually we just give a full refund.
No hoops. They can cancel and request a refund by calling support or do it entirely online without any need to interact with a human.
The only people who might have a good reason for a chargeback are people whose credit cards were stolen and the thieves purchased something from us to check if the card was valid. We almost never see such chargebacks.
Almost all the chargebacks are people who tell their bank that they don't recognize the charge but they have actually been using the service actively for years. Some are on monthly subscriptions and so have had dozens of charges from us before and now suddenly have no idea who we are.
Heck, a fair number of these people even have had their subscriptions stop because their on-file card was no longer valid, came to their account page at our side and updated their payment info to reactivate their subscription, and then the next time it is time for renewal they are calling their bank saying they never heard of us.
I don't think we have ever been able to convince the bank or card companies to deny any of these chargebacks. None of the use or transaction history matters. They just tell us to FAX them a copy of the customer's signed receipt from the original sale.
[+] [-] choppaface|3 years ago|reply
Max Levchin sort of tore apart Sift trying to get it to spit out money. I’m sure being able to play chargebacks from both sides was always his dream.
[+] [-] randombits0|3 years ago|reply
[+] [-] Waterluvian|3 years ago|reply
Wow really? I thought that abuse would be a certainty given grads have no assets and you can’t repossess a degree.
[+] [-] thathndude|3 years ago|reply
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
[+] [-] Bnichs|3 years ago|reply
By putting the onus on the legal system it allows merchants to commit smaller scale fraud more easily because normal people don't have lawyers on hand and aren't willing to do so for a $30 case of fraud, as justified as it may be.
[+] [-] pwdisswordfish9|3 years ago|reply
In my experience, insurance adjusters are completely oblivious to the distinction here—that there are your company's rules, and then there's the rule of law, i.e. something bigger than you or your boss or your boss's boss, etc.
Insurance carriers especially benefit greatly from the misconceptions held by those in their workforce (and who end up seeding public perception with the same errors), even when they're pretty easily shown to contradict the law. It's almost certainly intentional.
[+] [-] puffoflogic|3 years ago|reply
[+] [-] Aspos|3 years ago|reply
Bank did its job and processed the payment, why should they be liable for all these?
If anything, your example is an illustration why those "protections" should be abolished.
[+] [-] brianhorakh|3 years ago|reply
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.
[+] [-] rurp|3 years ago|reply
If Visa ends up crippling this ability there's no chance I'll use their cards again.
[+] [-] vineyardmike|3 years ago|reply
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.
[+] [-] phpisthebest|3 years ago|reply
[+] [-] snoopy_telex|3 years ago|reply
[+] [-] InfamousRece|3 years ago|reply
[+] [-] jimbob45|3 years ago|reply
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|3 years ago|reply
[+] [-] danlugo92|3 years ago|reply
[+] [-] tumetab1|3 years ago|reply
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/2021/12/15/235295...
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_2...
Others things to note: No statement by Visa in decreasing taxes on chargebacks to merchants.
[+] [-] twawaaay|3 years ago|reply
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.
[+] [-] thathndude|3 years ago|reply
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_2...
So, to be clear, a non-impartial actor is providing the “data” justifying the anti-consumer activity. I’m shocked!
[+] [-] hn_throwaway_99|3 years ago|reply
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.
[+] [-] dazbradbury|3 years ago|reply
On that note... Why can't customers cancel a chargeback as easily as they can create one? The whole system is a UX nightmare for all parties involved.
[+] [-] thathndude|3 years ago|reply
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”
[+] [-] kelnos|3 years ago|reply
And then you have the problem of aggregators like Square (your example), where they have their own prefix, and then apparently do a pretty bad job of making sure their merchants pick reasonable names. And then there are regular merchants who use their company name, which might be wildly different from the name of the store.
I do wonder how much "friendly fraud" is just someone looking at an inscrutable charge description on their statement, having no idea what it is, and disputing it on those grounds, even when it was a valid charge.
[+] [-] supertrope|3 years ago|reply
[+] [-] atourgates|3 years ago|reply
> "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.
[+] [-] gruez|3 years ago|reply
>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.
[+] [-] tristor|3 years ago|reply
This GREATLY weakens consumer protections for basically no upside by enabling bad actor merchants. End of story.
[+] [-] thathndude|3 years ago|reply
For example, I am an attorney who practices in the space, and I recently filed a dispute with my credit card. In response to my dispute, which I supported with a sworn affidavit, the retailer responded with a blatant, demonstrable lie. They said I never contacted them. Of course, they messed with the wrong person, and I responded with additional evidence and substantiation. I am confident I will win. But most consumers are not going to be able to execute on a dispute the same way that I did. Most consumers just get screwed by the lie. And that’s under the CURRENT system. So now we’re making it even easier for them to lie and screw over customers. Great
[+] [-] metadat|3 years ago|reply
Consider the phrasing "first party" instead of "cardholder", to make it less obvious who they're referring to.
[+] [-] babyshake|3 years ago|reply
[+] [-] choppaface|3 years ago|reply
This change by Visa is going to be abused by big merchants who have legal teams draft up bullshit blanket responses to scare consumers and then exit pre-arbitration. Since the cost to arbitrate is $400 minimum, it’s difficult for consumers to go through with it.
Note that Visa is citing a report by Sift, who is a YC company that is one of the worst data brokers out there. They were extremely non-CCPA-compliant as Jason Tan found out the hard way: https://www.nytimes.com/2020/01/15/technology/data-privacy-l...
[+] [-] uoaei|3 years ago|reply
[+] [-] caf|3 years ago|reply
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.
[+] [-] oliwarner|3 years ago|reply
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.
[+] [-] nickjj|3 years ago|reply
> 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.
[+] [-] metadat|3 years ago|reply
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.
[+] [-] runnerup|3 years ago|reply
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.
[+] [-] joshstrange|3 years ago|reply
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|3 years ago|reply
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.
[+] [-] mfDjB|3 years ago|reply
[+] [-] davidg109|3 years ago|reply
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.
[+] [-] dataflow|3 years ago|reply
> 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?
[+] [-] tehwebguy|3 years ago|reply
Incredible quote, Mike must be the smartest guy in the whole company!
[+] [-] NonNefarious|3 years ago|reply
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).
[+] [-] perfectstorm|3 years ago|reply
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?