After Ilan successfully filed a chargeback on a company, the company decided to bill him directly for the amount that was refunded. What’s even sneakier is the company (which Ilan didn’t name) waited until after they reported the matter resolved to the Better Business Bureau. Now Ilan’s wondering what options he has to fight back.
Here’s Ilan’s full story:
My wife and I recently issued a charge back with American Express on a transaction with a merchant, as they had not provided the services we agreed to. AMEX reviewed the dispute and found in our favor. However, the merchant is now attempting to bill us directly for the balance AMEX awarded us. Do we have any recourse in this mater? We are concerned they may attempt to collect on this, and ding our credit rating. Can you offer any recommendations?
We had previously attempted to resolve the issue amicably with the merchant via telephone/e-mail, and then eventually with EECB and a complaint through the Better Bureau. At each of these steps the merchant dragged their feet on responding to our complaint. We eventually mentioned the issues in question to AMEX and they recommended we issue a charge back sooner rather than later. In good faith, we waited until the last possible moment to dispute the charges. We were hoping that the company would see the light and decide to work with us, on our credit card.
Up until the point that AMEX found in our favor the company was not responding to our complaints. As soon as we were credit for the amount in question, they responded to the BBB complaint (almost 60 days later). They indicated that the matter was “resolved” via our dispute at AMEX and asked that the BBB close the case.
Now we are staring at a bill that is dated weeks after their response to the BBB. E-mails and phone calls continue to go unanswered.
We appreciate any advice you can offer on what to do next.
First of all, we suggest you immediately re-open a complaint with the BBB and indicate that the company lied to the BBB about resolving the issue. You should also write a letter back to the company and make it clear that you consider the matter settled as per the terms of your original credit card purchase. As far as protecting your credit, you’ll just have to wait to see if it shows up on your credit report—if it does, then you can take action to dispute it and have it removed.
You may want to also check with legal services in your state (try your state’s Attorney General website) to see whether the company is committing mail fraud by billing you for a transaction that was already reversed.
(Photo: Getty)
Clearly whomever this company he does business with has his address and is capable of direct billing. If it were Target or K-Mart like then they couldn’t send him things to his house….right?
Or did I read it wrong?
I wonder if the OP is holding back on the identity as additional leverage against the company? Once it’s published here, they really have nothing to lose and no incentive to resolve the issue to the poster’s statisfaction.
Pylon’s analysis without knowing more detail is good enough– restitution claim for the merchant on a partial breach. Are you in law school Pylon? Just curious…
IANAL, but I would tend to agree with Pylon83 that AmEx’s decision to allow the chargeback is not the final, “legal” say in the matter. If the company chooses to continue to pursue payment, they may be jeopardizing their standing with AmEx, but I would hope a court would evaluate the case on its merits, and not just defer to AmEx.
That said, the OP needs to get documentation from the BBB that the company has stated on the record that this matter is “resolved” — preferably, the company’s original letter to the BBB, if this was communicated in writing. With this in hand, I would think it’d be a slam-dunk win for the OP if the matter went to court.
Write “FUCK OFF” on the bill and mail it back. When the collection agency calls, follow the appropriate steps (found all over the Internet) to properly inform them that the debt is not valid and you do not owe it. If they ding your credit report anyway, sue their ass for illegally reporting an invalid debt. This is all very easy to do.
@jimconsumer:
Very easy, and very incorrect. The merchant can probably easily prove the debt is valid. Amex’s decision won’t be dispositive in court.
Okay this is killing me… what company is it???
If I was in this situation, this particular transaction with this merchant in my opinion has ended, your payment to them was through your AMEX and because of what occured AMEX ruled that their services based on their merchant agreement with AMEX were wrong and returned the charge to you. Your interaction in regards to payment with this merchant was through AMEX, and I dont think the merchant should be able to contact you directly you paid with your AMEX. I would call your state Attorney General
Sigh. I really wish it was so, but just because AMEX says you don’t have to pay doesn’t mean you don’t have to pay at all, just that you don’t have to pay with Amex.
Kinda like if you put a stop payment on a check. You still owe them the money, it’s just that your bank agreed not to pay the check.
What others have said: contact the AG and BBB again, and good luck!
Just as consumers agree to waive legal rights and accept binding arbitration, so too, can merchants in their agreements with third party payees, aka credit card companies.
By accepting the terms of their merchant agreement, it may well be the case that they must abide by any chargeback ruling. I’d bet money on this.
@Trojan69: Completely standing by what I said earlier, Trojan I bet you’re right. Still — as previously stated, IANAL — legally, can the OP rely upon the terms of a contract to which he was not a party (i.e., that between AmEx and the company) to protect him if AmEx decides to pursue him directly?
D’oh!, instead of “if AmEx decides to pursue him directly,” I meant, “if the company decides to pursue him directly.”
@Cliff_Donner:
No, he can’t rely on their contract to protect him. I don’t think you could make the case that the consumer is a true third-party beneficiary to the contract. I would take any of your bets that the Amex ruling controls. Amex is not an adjudicative body, and their determination means nothing more than they won’t pay the merchant. As stated above, it’s no different than stop-paying a check. Just because the bank decides not to honor the check does not extinguish the debt. Too many arm-chair lawyers on here with no legal training or knowledge to back up their wild assertions of the law.
@cheviot: I isn’t the same as a check. In the case of a check, the company didn’t enter into an agreement with a third party and the terms that are included in said agreement. I am no lawyer, but it would seem that there could very well be binding clauses that prohibit the very action the company has taken.
I’m not saying it is set in stone, but it is a very real possibility.
@Pylon83: So does this mean that you are a lawyer? If so, I’d be interested in knowing the statues that would apply here.
I think that in all this discussion on chargebacks we seem to have forgotten the latter part of the post (taking Ilan on his word for the moment).
After the chargeback, the company told the BBB that the matter was resolved. Subsequently they received a bill dated after the case was closed, which would seem to me to be pretty good evidence that the bill was sent out in bad faith. That the company hasn’t responded to any further attempts to contact them reinforces that.
Now there could be some details omitted, but on the face of it the consumer appears in the right.
@rmric0:
Admissions to the BBB are not going to be binding in court, if it comes to that. It’s not a judicial admission, which would be binding. It may be persuasive, but it won’t be binding on them. If they can explain it away to the satisfaction of the finder/trier of fact, it will be essentially irrelevant.
@rellog:
No, I’m not a lawyer. But notice how carefully I chose my words “Legal Training and legal knowledge”. I do possess those.
Further, a clause in a contract between Amex and the merchant will not operate to affect the rights between the merchant and the consumer. Sure, Amex could sue the merchant for breach of any such provision, but it won’t prohibit the merchant from collecting from the customer, they may just have to pay some sort of fine, if Amex can prove they were actually damaged by violation of that provision. Again, the consumer is not 3rd party beneficiary to the contract between Amex and Merchant. There is no pecuniary benefit that is to be conveyed to the consumer that would allow it to operate as such. Further, I’m not even sure that “all amex cardholders” can be considered a 3rd party beneficiary even if the facts worked in that favor. It’s too broad of a group that is not specifically identified in the contract.
Re-open the case with the BBB. Then contact the state attorney general.
@compuwarescc: Indeed, so we know what company to avoid…
@Pylon83: Wasn’t sure if you were directing this entire post at me, but I didn’t mean to suggest that I thought that “the Amex ruling controls” — in fact, thought I’d expressed just the opposite. I just meant to agree with Trojan69 that it’s likely that the merchant agreement with the CC company includes language that compels the company, as a condition of using their payment service, to agree with any chargeback ruling that the CC company makes. (Anybody know if this is truly the case?) This would only help the OP if AmEx chose to make itself a party to any “litigation” that the company filed against the OP. If AmEx chose to wash their hands of the affair, the terms of AmEx’s merchant agreement with the company wouldn’t help the OP.
I would also agree with you that “Admissions to the BBB are not going to be binding in court,” but I can’t see how they can “explain it away” without appearing to be a bunch of shifty, lying dirtbags.
Thanks for your contributions to this discussion, you bring an interesting perspective.
For the 20 billionth fucking time… this is called FEDERAL MAIL FRAUD. It’s a felony to send an improper demand for money through the USPS. Take them to federal court.. case closed.
@guymandude:
Yes, but if you would read the comments, you would see that it’s unlikely that the demand for money was improper. They likely have a good-faith belief that they are owed the money. And an individual can’t sue for mail fraud, as it’s a crime, not a tort. You have to get the Government to charge them with it.
@Pylon83: So what? Do you know how many companies I have caused to quake with fear by calling up, asking for a supervisor, asking for their employee ID, telling them I was recording the phone call to be used as evidence and did they know what Federal Mail fraud was? So go home whiner. Either turn around and bend over like the other lemmings or go strong to the hole. Your choice. SO either STFU and quit your bitching or handle it. There is no middle ground.
In general, credit card agreements requiring the merchant to accept the credit card issuer’s charge backs are written and intended to prevent the merchant from suing the credit card issuer, not the consumer.
@guymandude:
Wow. That was a rather inappropriate, and nonsensical comment. Perhaps you should grow up and learn to handle situations without involving emotion, as you get alot further. And good for you, being able to intimidate phone reps who don’t know any better, what a big man you are.
@Pylon83: I too am not a lawyer, but perhaps you can help me by answering this question:
Why can this event not be construed as two independent transactions with transaction 1 occurring between the seller and AMEX, and transaction 2 occurring between the AMEX and the card holder?
The seller agreed to the transaction in good faith that AMEX would reimburse them for the value of the good/service provided. Similarly, AMEX was willing to play that intermediary role because they have a good faith belief that their card holder will reimburse them for expenses incurred (plus associated fees and charges).
A test of this two transaction model might be to ask “What is the seller’s liability to AMEX in the event the card holder refuses to pay their bill?” If the answer is that the seller has no liability, then how can one argue that there is only one transaction between the seller and the card holder?
@cheviot: I don’t think this situation is analogous to the canceled check analogy because a check is a promissory note between the check writer and the check recipient. A credit card slip is effectively a promissory note between the card holder and the credit card company.
I am not a lawyer, but when you sign for a credit card transaction there is a disclosure where you sign stating
“I agree to pay the above total according to the card issuer agreement”
To me that means you are authorizing AMEX to pay the total charges in accordance with your card holder agreement, and their agreement with the merchant, therefore, if AMEX determined that the merchant for some reason failed to meet their merchant obligation thats between the merchant and AMEX. You agreed to pay the total via AMEX based on your terms as a cardholder, not directly to the merchant
@guymandude: Jesus Christ man, Pylon83 is just stating the facts. Just because you call it mail fraud for the “20 billionth fucking time” does not mean it is.
@Kajj:
Good one!
I was told by a citibank rep that if this happens … to just do another chargeback. I had a problem with a dirtbag company (hometowncandy.com) ripping me off & had to do my first chargeback ever. I was worried that they’d just charge me again later. I was told by a citi-rep that once you authorize a merchant to recieve payment via your card… that they can charge you again later. Sounds like an insane policy.
@Pylon83: Go home whiners. All of you. This works and it works well. If you’re not ready to do what needs to be done then STFU and go home. This issue has come up repeatedly and yet you lemmings still refuse to understand the nature of the transaction. So enjoy getting pounded in the ass by big business. It’s idiots like you guys that enable them to pull this nonsense in the 1st place. Well done!
This was a pretty damn vague post. To me when someone is being vague they are not telling the entire story on purpose, usually to benefit their side of it.
I can’t pass judgment on this without knowing more about the situation.