A reader wrote in to ask us if we’ve ever seen anything like the “Chargeback Abuse Policy” that Luxury Car Tuning in Las Vegas includes in their terms—”You agree not to file a credit card or debit card chargeback with regard to any purchase,” and if you do anyway, you have to pay any fees that normally the merchant must pay when dealing with a chargeback. The reader wants to know, “Is this allowed by any merchant agreement that you know of? Sounds pretty ridiculous to me. How likely would it be that they could get away with this?”
We’ve never seen any merchant try to interfere with consumers’ rights on this level. So why would Luxury Car Tuning resort to such a bizarre statement? It could be because they’ve been burned by chargebacks before—banks tend to err on the side of consumers when a chargeback request is made, and merchants can and do lose their ability to accept credit cards if they exceed a certain number of chargebacks.
Having said that, we can’t imagine how the company can enforce such a demand, but maybe the best thing to do is simply take your business elsewhere and avoid them altogether.
Here’s the actual text, taken from their terms and conditions page:
Chargeback Abuse Policy
Purchases will appear on your credit/debit card statement as “Tuning Concept” or “Luxury Car Tuning”. You agree not to file a credit card or debit card chargeback with regard to any purchase and instead abide by the dispute resolution procedures outlined below. In the event that you breach this agreement and file a chargeback, upon a resolution in our favor of the chargeback by either the credit card issuing bank, the credit card processor or by VISA or MASTERCARD, you agree to reimburse us for any costs incurred in researching and responding to such chargeback, including without limitation, our actual costs paid to the credit card processor or our banks, other third parties, and the reasonable value of the time of our employees and owners spent on the matter, as determined in our discretion in good faith. You further agree that all dispute resolution procedures below will be deemed waived by you, and that these amounts will be added to the original amount of the order, and that this total amount will then be immediately due and payable. If your chargeback is upheld, you agree to pay all of the same costs, in addition to the original purchase price, but we will use the dispute resolution procedures below to confirm and collect such amounts.
In the event that a chargeback is placed or threatened on a purchase, we also reserve the right to report the incident for inclusion in chargeback abuser database(s) of our choosing and in our sole discretion. The information reported will include name, email address, order date, order amount, IP address, full address, and phone number. Being listed on such databases may make it more difficult or even impossible for you to use (any of) your credit card(s) on future purchases with us or other merchants. Chargeback abusers wishing to be removed from the database shall make payment to us for any outstanding amount owed to us + $50 for processing and handling by wire transfer or such other means as we may require.
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@brettt:
Apparently No – somebody already picked up on this article:
[gadgets.boingboing.net]
specific quote:
VISA specifically prohibits these “no chargeback” policies” in its rules.
“No Chargeback” Sales Receipts Independent entrepreneurs have been selling sales-receipt stock bearing a statement near the signature area that the cardholder waives the right to charge the transaction back to the merchant. These receipts are being marketed to merchants with the claim that they can protect businesses against chargebacks; in fact, they do not. “No chargeback” sales receipts undermine the integrity of the Visa payment system and are prohibited.”
@akede2001: You might want to verify that – we had a Visa card with exactly one transaction on it, and we disputed it (the company did not perform the service they charged us for) and were specifically told by the credit card company NOT to pay it until the dispute was finalized. They told us that paying it took away our rights to dispute. Paying off your credit card in full is a good thing for your finances, but it may remove your right to dispute a charge.
A lot of scammers do this sort of thing. If they can just get people to delay chargebacks, they can continue the scam as deadlines pass for consumers. One example is HomeTownCandy.com, which appears to STILL be scamming people after years of this behavior. Check out their chargeback policy:
Should we wish to cancel your order for any reason, or require a refund, please email us at support@HometownCandy.com with the word CANCEL in the subject block. If your order has not yet shipped, we will cancel and refund your order promptly. If your order has shipped, then a refund will be issued after the package is returned to and received by us per the return policy set forth above. Chargebacks not preceded by a cancellation request email will be assessed an administrative fee of $25.
Since they just don’t bother shipping orders, this makes it easy for them to continue the scam…
There is a large thread on vwvortex forums about a beta test where certain things were promised and lct manipulated their wording to save money. Btw it seems like their product isn’t very good either.
Has anyone contacted Visa or MC to alert them of this merchant?
@SpenceMan01: <blockquote>text</blockquote>
There are a lot of companies (usually those that deliver ‘services’ like the web hosting person above) that have gotten *lots* of “fraudulent” chargebacks and are sick of it. The problem for service is, let’s say that your server is delivered, and it works fine, but for some reason it’s slower than you think it should be or you can’t transfer files at the speeds you think you should be able to transfer them at. Should you do a chargeback or just not continue with the service? The problem is a *lot* of people do a chargeback but the web hosting company’s position is they delivered what you ordered… and the circle can go on for a while. For products it’s obviously a lot more clear unless they’re describing them differently than what you get, which is a whole other set of problems…