I’m not sure if this is a scam. My daughter runs a small, service based business. She went to a client’s home and provided the service, the client paid by credit card (most do). The fee was over $1,000 which the client knew about prior to asking her to come to the property.
A few weeks after the visit the EFTPOS mobile provider informed my daughter that the client was disputing the charge and the full fee was charged back to the business immediately.
My daughter promptly provided all the evidence she had to the EFTPOS machine provider (eg evidence that she had been to the house, and the service had been completed), everything she could think of.
She has been advised that the client’s bank will be making the decision on whether or not the original charge was legitimate and that the decision is final. She will be advised of the outcome after approximately 90 days.
Wondering if the client is a scammer?
If not, can anything further be done to establish that the charge was legitimate?
Is there an organisation that could provide assistance - eg Consumer Affairs or similar for small business?
Thanks in advance to anyone who can throw some light or provide assistance on this.
Notwithstanding this, there is also chargeback fraud:
where some individuals think that it is a way to ‘steal’ from businesses. It is a crime and if intentional, may result in charges being laid.
Assuming the service was delivered to an acceptable standard, it appears that the payment was made in person and the services were not disputed by the client, I believe that it would be difficult for the credit card chargeback to be successful.
If a stolen credit card was used and chargeback proved successful, I expect that your daughter would have information on the client to take to the police so that she can take action.
To be clear, was it a credit transaction, or a debit transaction?
If a credit transaction. then the credit provider, Visa, or MC for example, has the final say on the outcome of a dispute.
If a debit transaction, then the issuer bank could have the final say.
I would advise your daughter to take this up with her bank, the acquirer. And dispute the chargeback. If the EFTPOS machine provider and the acquirer bank are one and the same, I would still dispute it again as possible fraudulent activity by the client (probably ex now) trying it on.
But it could be a mistaken action. Some businesses use completely different names that show up account statements, compared to their trading name. Baffles me at times until I match account statements with receipts.
It is a relief to know that other consumers find the current practice of business names/shop names differing from the owner entity names problematic. It’s high time ACCC/ASIC/Office of Fair Trading etc had a crack at making business names and owner entity names the same. Ultimately it benefits the businesses too, as there would be less disputes.
There are many posts on this site about customers being dealt with badly and advice given to claim a charge-back.
Well on the merchant side there is plenty of scope to dispute these charge-backs.
If a service was delivered, as agreed, for an amount, as agreed, and good business practice of proper receipts held by each party, then I cannot see how a charge-back can succeed.
As it is a credit transaction, then the credit provider will decide the final outcome. I would dispute the reversal with my merchant bank. And keep at them to reject the charge-back. And if they are spineless do-nothings, take it up with the credit company.
This sounds suspicious and sounds like the chargeback might be disputing an unauthorised transaction.
Usually it is more difficult to get chargebacks for unauthorised transactions with presented cards, that being card inserted/tapped and when required, PIN entered. It is easier to get chargebacks for unauthorised transactions with manual entries. I wonder if the client knows this is the case and has said to their card issuer they didn’t authorise the payment and proof is it wasn’t made in person (for service where one would reasonably expect it to be present for payment). Or it could be a stolen card, or stolen card details.
As manually entered cards (credit card number, expiry date and CVV entered into a payment system) are easier to dispute an unauthorised transaction, our bank’s payment system doesn’t allow manual entries through their business POS payment condole. They indicated this was something they adopted as the risk of unauthorised transactions claims is high. They recommend looking at alternative payment platforms… so we ended up using a non-bank payment system to allow us to make manual entry payments. We accept the risk associated with manual entries and avoid them as much as possible (in our business we generally only accept payment in person with presentation of a card/cash - we have some low risk exceptions).
Has your daughter tried contacting the client if she has contact details to find out what is going on? I personally wouldn’t be going back to the house as there could be potentially personal safety issues if something untoward is going on. Maybe call would be best. Contacting might give light to why a chargeback dispute was lodged.
If the client’s bank rejects the payment there are other options available to the business to recover the debt. Critically this assumes the client’s identity can be reliably established for the business to make a claim through the legal system. For a small debt this is usually by application to the tribunal or equivalent (VCAT, NCAT, etc ) in the state or territory where the business was carried on. In the interim your daughter may find it useful to discuss her concerns with the local police if there is any possibility the client was not the legal holder of the card or who the card said they were. Especially noting @phb comments in the prior post about attempting to determine if the client is aware of the problem with payment. One would hope the bank/s and credit provider would be quick to pick up and advise on the card having been stolen or card identity copied leading to advice the client was not the card holder?
With clarity the following is opinion not legal advice.
As an educational experience:
wasn’t the customers inability to know the PIN a red flag? Not suggesting any of the following are the case, but the card could have been stolen, it could have been used by a family member without permission, or less likely (to me) the customer could be scamming.
Did she get a signature on the invoice denoting service was supplied to an acceptable standard?
When you wrote ‘taken manually’ it has been yonks since there were manual card imprint machines and forms with signatures so which process was followed? Perhaps ‘Card not present’ such as when a charge is made verbally by phone? That would require the CVC although not a PIN similarly to e-commerce transactions. If that process was followed and the customer was the card holder and they knock back the charge, it seems the customer might be a scammer and refer it for investigation of fraud. If there was no CVC provided in the transaction that probably presents another issue if the resolution you describe is unfavourable although an approval without a CVC, assuming that may be part of what transpired, might be argued to be on the card issuer for lack of process/routine diligence?
Yes, you are right - it should definitely be a red flag - this is something my daughter will have to take note of.
The customer signed a consent form and all customers who request a receipt or invoice are provided with same. I don’t know if this happened for this customer.
The transaction was made using the EFTPOS machine while at the customer’s premises. The credit card details get keyed into the machine by the operator - (I’ve done this while volunteering for a charity and processing regular monthly donations manually with the card not present).
You haven’t mentioned the type of service (and you don’t have to of course) or the type of client.
It could be that a family member may be monitoring card usage and helping to pay bills for an elderly person. I know I do that for my dear old Mum.
Not knowing the pin for a card would be not unexpected, but also forgetting what the payment was for could be a reason for a family member to query it and request a chargeback on behalf of the client. As an unauthorized charge. Particularly if any paperwork for consent, and payment receipt cannot be found. A not unusual occurance in my case and my Mum.
Worth a thought before going off and talking about deliberate fraud, or considering court action.
