Customer used Dad’s credit card, now Dad won’t pay

nicolea72

I don`t know if anyone has run into this before or has any advice.  Here`s what happened.  I run an internet business.  I accept credit card payments and use an address verification system to protect against fraud.  Last month I received a chargeback notice from my merchant bank saying a customer was disputing the charge.  I disputed the chargeback and provided proof of positive address ID, order fulfillment and delivery acceptance from UPS.  The customer still maintains they did not make the order.  Through some investigating on my own I found out that the order was made by a son using his dad`s credit card and now his dad won`t pay.  My merchant bank says as long as the card holder maintains that he did not make the order Visa will not pay the charge and I am basically out of luck.  The order is for less than $100, so I`m not super upset about the money.  It`s mostly the principal of the thing.  This guy is stealing, he ordered the product and now isn`t paying because of a technicality.  Is there anything I can do?  Can you claim fraud on a credit card that isn`t yours?

tdiddy

well have to contacted the Dad? I would call him and offer free shipping back for the product. I would also record the conversation to the credit company can hear it.

vwebworld

Absolutely, contact the Dad. If he is not paying he is not entitled to the product.
~Roland

durtbagz

wow, the timing of this issue could not have been better. i`m in the process of setting up my merchant account for my online business and my clients are high school and college kids. i would agree with the others that first and foremost, get the product back. you`ll be out the money (and charged for that by the processors), but at this point, the bag is `stolen`. i would imagine that if you contact the card, prove that the order was valid and product delivered as promised, then the issue should be between the card and the card holder, not you. also, you just gave me an idea that maybe i need to put a policy in place in the event that this happens to me. when kids are your clients, it`s a very real possibility and a scenario that i didn`t even think of.

iouone2

I would say the acceptance of the package gives you an edge legally. But it`s still going to be a bit of a hassle. I wouldn`t let up on the card provider too easily. Continue contacting all parties involved. Eventually the dad is going to realize the problem isn`t the stores... it`s between the father and son. If it`s truly a scam (which it sounds to me it is...) I would give the card provider some time to respond, but I would definitely continue pursuing the fraudulent purchase. I wouldn`t give to the "free return shipping" unless that`s already your policy. You don`t want to get any further involved with this transaction that you already are. Especially considering the actual cost.Shoplifting is a problem in retail stores. Credit card scams using loopholes in the system are just like shoplifting. Eventually, the bottom line (Profit / Loss) must absorb the losses.Eventually credit card companies will address this issue more fully. It`s just very new to the business world. And education by example is the best way to get the card companies to become better. Don`t let off of them. They need you (the business) to make money. Don`t allow them to set you aside too easily.

iouone2

good call nhgnikole

ToddF

yep a bit of a scare tatic might work with dad and yes, you could prosecute them for that and get them in serious trouble. Is it worth to Dad now? probably not.

nevadascul

First, did you get the security code off the back of the card?  Most businesses now require the security code.  Second, have you talked to the credit card company and provided proof of delivery of product to the address listed? 

nicolea72

Thanks everyone for the advice.  I have already gone through the dispute process with my merchant bank and the customers card company which is Visa.  Visa is standing by the customer who says it`s not his name on the order therefore not his responsiblity.  Visa does not care that the product was delivered to the customer`s billing address and handed directly to a person at that address.  My merchant bank told me this has happended before with Visa and none of their merchants have ever won.  I have already contacted both the son and the father and told them that if it was there intention not to pay they needed to return the product.  (I did not offer to pay for the return shipping)
I guess my next step will be to inform them that I will have to report the fraudulent activity to the police.  They are not in my state, do I just call their local police dept?  Or because it`s interstate does it involve a federal authority?

nevadascul

The criminal act can be report to your local police.  It is a fraudulent financial transaction.  It can be prosecuted in either state.

nicolea72

so now you know that the name on the order must match the name on the credit card exactly. If you are using a web interface to capture orders, you can built logic into your code to ensure this is an exact match. QUOTE]
What company do you use that matches names?  The only thing I have ever found is address verification.  Even if you call into the issuing bank`s verification number they only verify the address and zip, not the name or phone number.  I already have automatic address and security code verification in place.  I would love to find some software that matches names so if you know of any please pass on the info.