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      07-19-2012, 03:23 AM   #6
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Quote:
Originally Posted by ronushi View Post
Its not the merchants fault at all he actually did the right thing to verify the payments. With that amount 5g's i would of done the same thing and try to verify the payment is received. Your friend should be lucky he is not in jail.
The amount of the work done to the vehicle was $1,000. The merchant is saying that he was assessed a fine of $5000 and now wants to hold my friend liable to pay it. the problem is, it sounds fishy. He was all too cool about it ( not like this merchant ) and started discussing what he's going to do to the vehicle.

Quote:
Originally Posted by Inspired View Post
Sounds like extortion to me. That is a federal crime.
That's what i'm figuring, I actually found this while searching google:

Quote:
Chargeback fee
The chargeback is the largest risk that is presented to banks and providers. This is not to be confused with a refund, which is simply a merchant refunding a transaction. In the Visa, Discover, and Mastercard rules, the merchant's processing bank is 100% responsible for all the transactions that the merchant performs. This can leave the provider open to millions of dollars of potential losses if the merchant operates in an illegal or risky manner and generates many chargebacks. The providers pass this cost on to the merchant, but if the merchant is fraudulent or simply does not have the money, the provider must pay all the costs to make the card holder whole. The chargeback risk is the largest part taken into consideration during the contract application and underwriting process. Some banks are much more stringent than others when assessing a merchant's chargeback risk.
If a merchant encounters a chargeback they may be assessed a fee by their acquiring bank. A potential chargeback is presented on behalf of the card holder's bank to the merchant's credit card processing bank. A reason code is established by the card issuer to properly identify the type of potential chargeback based on the card holder's complaint. The most common complaint is that the card holder can not remember the transaction. Usually, these potential chargebacks are corrected when the merchant's processing bank sends over more details about the transaction. Some providers charge a fee for this service, known as a "Retrieval Request". A chargeback can also be related to a fraud or similar dispute that the card holder is claiming to the merchant. This fee can be charged by some providers whether the chargeback is successful or not and is not dependent on the amount of the chargeback.
Currently both Visa and Mastercard require all merchants to maintain no more than 1% of dollar volume processed to be chargebacks. If the percentage goes above, there are fines starting at $5000 – $25,000 to the merchant's processing bank and ultimately passed on to the merchant.
In all cases, a chargeback will cost the merchant the chargeback fee, typically $15–$30, plus the cost of the transaction and the amount processed.
* Cliffnotes: Unless the merchant processes fraudulent transactions all the time, the most he was charged ( if anything ) is $30 chargeback fee.

Sounds like extortion. Going to have my friend call a lawyer in the Morning.
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