Citibank Bad Banking Practices Cambridge, Massachusetts

Thanks for the link http://www.consumerfinance.gov/complaint/, I will be going there. Citibank "reopened" my account after I closed it due to a pending charge and never ever told me until 4 months later when it had racked up $118 worth of charges. That isn't a lot of money it's the principal, I called the Citibank call center in india and they BALD FACE LIED TO ME TO GET ME OFF THE PHONE. THe manager said he would reverse all charges and close the account, complete lie did no such thing. The next day I call my balance is still -118 dollars, so finally they reverse some charges and I only end up getting ripped of for $59 bucks. This time I go into a Citibank branch and close the account, extremely shady.

Know your ripoff rights.  The government now has a powerful agency to stop bad banking practices.  You can file a complaint at http://www.consumerfinance.gov/complaint/

Robert, do your own research.  Plenty of it on the internet.  Will see you and your team in court.

You did not provide a link to a web site that proves your claim, "By law the cardholder has two years to file a dispute. Your sales can be reversible for two years."

You posted a bunch of hot air from a merchant provider's web site. That is someone's interpretation of what they think is a law. You have failed to prove there is such a law.

Sign the petition today.

http://act.watchdog.net/petitions/2221?share_ref=TD4J2LdvOWM

Robert, make sure you tell me you work for Citibank when authoring these rebuttals.

http://www.ripoffreport.com/Search/Citibank.aspx

Understanding Chargebacks

Accepting credit cards as payment in your business transactions is a very promising concept. You can increase your revenue, your customer base and improve productivity. By simply getting yourself a merchant account to be able to accept cards for payments, you are adding convenience, cost-effectiveness and a professional image right into your business. If you have already taken this big leap, you probably have experienced how confusing credit card processing can be. There are quite a number of things that you might need to know and remember. Although the entire process can, with time, get to be fairly easy to get around in, there is one important aspect about merchant accounts that you need to know very well - chargebacks.

What is an online merchant to do?

Reduce the Chargebacks your business will receive by education and prevention.

(Read on, tips to avoid potential Chargebacks at the bottom.)



What is a Chargeback?
As you know, customers or cardholders obtain credit cards from banks,
which are referred to as the "issuing bank." A chargeback (also known
as a reversal) is a form of customer protection provided by the issuing
banks, which allows cardholders to file a complaint regarding fraudulent
transactions on their statement. Once the cardholder files a dispute,
the issuing bank makes an investigation into the complaint.

Once the transaction is proven to be indeed fraudulent, the bank will
refund the original value to the cardholder. From the merchant's point
of view, if you do not prove the transaction to be legitimate, the bank
will take back the entire value of the transaction from your account,
along with an additional fee. This chargeback fee will range from $0 to
$100, depending on the merchant bank sponsoring your

account. If the cardholder complaint is proven untrue, no refund is
requested from the merchant, though additional processing fees may be
charged. For obvious reasons, it is best for your business not to get
involved with chargebacks. With situations like these, the merchant
stands the risk of losing products or services that have already been
sold, the payment, the fees incurred for payment processing, money for
chargeback penalty, or even possible commissions for currency
conversions. It is thus best to avoid chargebacks at all times. Also,
note that merchant accounts receiving too many chargebacks can be
labeled by credit card companies as fraudulent, and this can be
potentially damaging to the image and the existence of your business.
Know also that credit card issuing banks take chargebacks seriously,
because they are at the most advantage. They don't only levy fees, but
they can also hold merchant remittance up to three months to cover the
fraud, or increase their commissions if they choose to label your
account "risky."
By law the cardholder has two years to file a dispute. Your sales can
be reversible for two years... That means saving documentation for two
years... Most banks will have a policy against handling disputes that
are more than six months old but if the cardholder pushes it they have
two years to file a dispute.
Reasons for Chargeback
As a merchant, you have to be fully aware of the most common reasons
why merchants receive chargebacks. These are the circumstances that you
also need to avoid at all costs. Note that most, if not all, chargebacks
are initiated by cardholders. These are primarily due to
inconsistencies in their credit card statements.

Fraudulent Transactions

The most common cause for chargeback is fraudulent transactions. This
happens when the credit card is used without the authorization and
consent of the cardholder. In cases like these, the merchant is held
solely responsible.



Credit Not Processed

Another common type of chargeback occurs when the customer may have
returned the merchandise to the merchant (e.g. when the cardholder
receives an item different from what he expected), requested to get
their money back but said credit was not posted to their account. In
these situations, merchants are also held liable for the charges.



Item Not Received

This is one of the most commons reason for chargebacks today. This
happens when the customer did not receive the item which they paid for
by credit card. As in the previous situations, the merchant is charged
accordingly.



Technical Problems

Many chargeback requests are due to technical problems during the
payment processes. Technical problems between the issuing bank and the
merchant may lead to cardholders being charged twice for the same
transaction (termed as duplicate processing). Problems with the
authorization process can also lead to account being charged, even if
the transaction was declined.



These are the four main reasons for chargebacks. There are a few more
detailed reasons, which can be attributed to situations such as faulty
cards and human errors made during the payment process. These cases,
however, may be beyond your control as a merchant.
The Chargeback Process
It can sometimes be difficult to stay away from chargebacks. What
must you do when it happens to you? It is good to take a look at what to
expect when a chargeback request against you is requested by a
cardholder. It is unfortunate that many merchants are actually not aware
of the tedious process that they need to go through. Here is the entire
process laid out in a step-by-step manner:

Step 1: The cardholder files a complaint by contacting his or her issuing bank about the erroneous transaction.



Step 2: The issuing bank checks whether the dispute is valid. If the
bank finds the request invalid, the dispute is simply declined and the
customer is charged with a processing fee.



Step 3: If the issuing bank sees a potential error, a provisional credit
is provided to the cardholder. The bank then initiates the usual
chargeback process, to obtain credit from the merchant's sponsoring
bank.



Step 4: The merchant bank sponsoring the account then checks whether the
chargeback is valid or not. They usually send you a notification to
inform you of a pending chargeback request.



Step 5: The merchant's sponsoring bank then does some research on the
validity of the chargeback claim. If the chargeback is found to be
invalid, they will decline said chargeback and inform the card-issuing
bank.



Step 6: Assuming the chargeback is invalid, the amount of the chargeback
is removed from the merchant's account and the merchant's bank will
notify the merchant about the outcome.



Step 7: If a processing error has indeed occurred, the corresponding
correction is then sent to the card-issuing bank for re-presentation.



Step 8: The merchant will be asked to provide the needed documentation
and proof to remedy the chargeback. If the documentation provided is
satisfactory, the claim for chargeback is denied and the customer will
be charged once again for the sale. If the documents seem to be
unsatisfactory, the chargeback amount will be provided to the customer.



As is probably obvious, the chargeback process is a very complicated one
and involves a number of different parties to remedy the chargeback. As
a merchant,it will take some time to manage and remedy a chargeback. A
typical chargeback process lasts anywhere from 6 weeks to up to 6
months. If eachstep takes the maximum amount for completion, then it
should not be surprising for a chargeback to pressure you for what will
seem like forever.
The Cost of Chargebacks
Though accepting credit card payments is beneficial to a business,
chargebacks can cause major drawbacks. If a customer disputes a
transaction for one reasonor another, you will have to go through a
rather complicated process, which not only loses you a sale, but costs
you otherwise unnecessary fees. Chargebacks involve quite a number of
stringent processes and complex procedures, which

may end up with you on the losing end.
Credit card online transactions are considered to be CNP or Card Not
Present transactions. Generally, a merchant account agreement specifies
that the merchant will be 100% liable for any type of possible online
fraud that might happen.

Sadly, whether it is an actual fraudulent transaction, or a case of
malicious attempt by a cardholder, the merchant will have to face the
consequences. If it is determined that there is not enough proof to back
up the transaction, the merchant will lose the sale and will be
subjected to chargeback fees, which will range anywhere from $50 to $75
or even more. Moreover, say you shipped the merchandise to your customer
through overnight shipping; you will have lost another $35 to up to
$100 on top of the sales revenue you lost.

It is unfortunate that online fraud, or fault on the side of the
merchant, is not the usual cause of chargebacks. Credit card
institutions are usually focused onkeeping their cardholders happy. They
also would like customers to be appeased so that they continue use
their cards to make purchases online. Theseinstitutions value their
cardholders' best interests, such that any form of dissatisfaction or
complaint usually results in chargebacks - all at the expense of honest
merchants.

The cost of chargebacks does not end only in losses in financial
aspects. Racking up chargebacks has even worse consequences on the part
of the merchant. During physical transactions, where both the cardholder
and the card are present, it is the credit card institutions who take
sole responsibility in cases of chargebacks. However, during online CNP
transactions, merchants are solely responsible. Having too many cases of
chargebacks will lead to steeper chargeback fees, as you will become
labelled by the credit card institution as a highrisk merchant.

Not only that, but having an excessive number of chargebacks can also
lead to the potential termination of your online account. This will
cripple your ability to accept credit card payments, and can lead to
severe losses to your business. It is important to note that merchant
accounts that become suspended due to high number of chargebacks are
almost always impossible to restore. If you are a small business
operating on rather thin profit margins, chargeback fees, increases and
suspension will all have detrimental effects. Even if you keep your
chargebacks to only 1% of your charges, the chargebacks

you receive will still require you to spend time in retrieving details
about the sale and in coming up with the necessary documents for proof,
as requested by the processing bank. Any time that you spend away from
the main focus of your business is a potential loss that can never be
recovered.



Chargebacks can cause many problems for a merchant. The expression
"guilty unless proven otherwise" is probably the best way to put it. The
credit card industry has made it easier for consumers to file
chargebacks and transaction disputes, while the merchants are left with
little industry support, if any.

As a merchant, the only route for you is the route that avoids these
situations as much as possible, you will need to protect your site and
your business from potential fraudsters and malicious buyers. Also, you
need to provide the merchandise at its very best or as described, as
well as the best kind of service, in order to avoid dissatisfied
customers who will dispute their transactions.
Swipe thru versus internet
A typical retailer maintains a store and has customers physically
walk in, present their charge card which is swiped through a terminal,
authorized and a charge slip is printed which the customer signs. This
type of merchant pays a rate lower than what an Internet/Mail Order
merchant pays and is afforded a much greater degree of protection in the
dispute process. The merchant can establish that the customer did in
fact walk in, made a purchase, and signed the charge slip. Additionally,
a smart merchant will ask for ID and record a drivers license number on
the slip to establish that the person did actually come in and made a
purchase. The merchant has an authorization number which doesn't in
reality provide too much protection but at least establishes the fact
that the card wasn't reported stolen or lost at that time.

With an Internet or Mail Order charge all a customer needs to say is: 'I
do not remember ordering anything from this merchant'. This is a
dispute that is filed when the customer receives their bill and sees the
('unknown'-) charge on the statement. This is called a "Retrieval
Request".
Retrieval Requests
Whenever there is a chargeback, there will be an accompanying
retrieval request. A retrieval request procedure is initiated when a
cardholder or a credit card institution disputes or questions a
transaction. They usually require a copy of the sales draft. As a
merchant, you probably know that it is your responsibility to keep sales
drafts, not only for tax purposes, but for cases of dispute as well. In
the case of Visa, merchants are required to keep sales drafts for a
minimum of 3 years. For MasterCard, they generally require storage for
only 180 days.

These requests usually accompany information such as the cardholder's
account number, the date of the transaction, the reference number and
the sale amount. Retrieval requests are very crucial. When it is
requested, you are expected to reply to it with the required documents
within the specified time given.

You are usually given ten days to provide a valid and legible copy of
the transaction receipt or any related documentation which can prove
that the transaction indeed happened. This can be in a form of a sales
invoice, rental contract, and so on. The document must contain the
cardholder's name, the card number,transaction date, the total
transaction amount, transaction or authorization number, the merchant
name and location, and the cardholder's signature if available.

When it comes to retrieval requests, timing is very important. If you
fail to respond, or if you respond late, the chargeback requested will
be granted to the cardholder and chargeback fees will be imposed on you.
Unfortunately, there is no acceptable excuse or recourse available for
merchants, in cases of failure to respond to retrieval requests.
Proof?

Of course as an Internet Merchant you will most likely not have a signed
charge slip. Your orders would typically be phoned in to you, emailed
to you, transmitted through a secure credit card browser or faxed in.
Emails are not considered signed charge slips even if you have a record
of the email coming from an account belonging to the cardholder. This
means you will overwhelmingly lose the vast majority if not all of these
Retrieval Requests because you have no piece of paper bearing the
charge with the signature of the cardholder.

Having a proof of delivery from the post office or UPS won't help. The
cardholder only needs to say that a delivery was in fact made. Some
goods that he or she never ordered were sent and the cardholder
unknowingly signed for them and then threw them out having no knowledge
of them and didn't want them wasting space. In the case of a delivery to
a business address it is likely that a person other than the cardholder
would sign for the goods and this of course defeats the signed receipt
process for the merchant. If the cardholder claims they never ordered
the goods there is no obligation whatsoever for the cardholder to retain
the goods and/or return them.

The cardholder does not have to explain or provide any explanations as
to how the merchant got their credit card information, and is under no
compulsion to report the card stolen since it wasn't stolen.
Prosecuting and suing cardholders
This is a right you of course have. The problem is the law
enforcement agencies will typically not work such cases, ask them if you
don't believe it.

The cardholders are afforded certain rights under Federal laws. If you
sue them it will be costly, especially since venue (where the correct
jurisdiction is for the case) is ill defined in Internet transactions.
Even if you do win you still need to collect.

Today the credit card holder is not the same as five years ago. The
advent of secured credit cards and visa/mastercard debit cards have
brought a whole different class of cardholder into the game. This is the
person with bad credit who a few years ago could not get a credit card.
Now they can get credit cards, practically anyone can get a secured
credit card or a credit card/debit card. True with a debit card the
dispute process is closed to the card holder UNLESS they say: 'hey I
never ordered this' and then they get all the rights of a real credit
card holder. It is also impossible for the merchant to tell a debit card
from a real credit card unless you can look at the card.
Preventing Chargebacks
Chargebacks are the bane of merchants all around the world. Though
chargeback cases can be won by an honest seller with presentation of the
correct evidence, the time that it takes away from the core of your
business and the hassle it creates makes the winning still not worth it.
The only advisable way to deal with chargebacks is to avoid them at all
costs.



Firstly, you have to be an honest seller. Honesty on your side means
fewer problems, unless customers create them for you. Thus, you should
make sure that you provide your items at their very best, and provide
the best customer service that your company can muster. This way, your
customers will not go to the extent of complaining about the transaction
to their issuing bank.



Secondly, it is very important to prevent fraudulent transactions and unauthorized use of cards.



Here are some of the warning signs, which are red flags for possible fraud:

- Bulk orders which seem to be beyond normal range. Though these
orders will increase your sales, be wary, as this can be a warning
signal, especially if you are dealing with a new client.

- Orders for big ticket items. A new customer ordering a big ticket
item should be subject to scrutiny first, before any transaction is
granted.

- Multiple orders made within a short period of time. This may be a
sign of unauthorized card use, so try to verify with the customer or the
issuing bank.

- Different billing and delivery addresses. Though there are certain
exceptions, it is advisable to verify this difference and check whether
the card use is authorized.

- Orders which demand rush or overnight delivery. Orders, especially
large ones, which request express delivery should be further
investigated, again especially with new customers.

- Orders made with the use of free email addresses such as Yahoo or Hotmail.

Fraudsters rarely reveal their true identities and instead use free e-mail providers to place their orders.

- Orders made with various tries on the card number or expiry date.
This means that the user is plainly guessing the expiry date, and the
credit card is

not actually at hand.

- Multiple orders made using different credit cards, but delivered
only to one address. For obvious reasons, do check whether the use of
these multiple cards is authorized.

- International shipping where Address Verification Service is not
applicable. International transactions are very risky, since it can be
difficult to retrieve the goods once they have left the country. While
not all transactions of this nature are fraudulent, it is safer to keep
your guard up and exercise extra caution. It is best that you follow
your instincts. If a transaction seems too good to be true, then it
might probably be, at the end of the day.

- Use the security feature provided by both Visa and MasterCard,
called CVV2 or CVCs, which matches security numbers found on the actual
card.



To prevent instances of chargeback disputes, here are some useful suggestions:

1. Make sure that you provide your customers with all possible contact
information and good customer service. This way, you will encourage
them to channel their complaints to you first, before calling up their
issuing bank to request a chargeback.

2. Be clear with your return policy, as well as your shipping
policies, and make sure that your customer clearly understands them
before transacting with you.

3. Aside from verifying the billing address and security code, request
the name of the card issuing bank as one of your purchasing policies.
Failure to provide this will be a big red warning flag.

4. Always send confirmation e-mails to your customer. These should be
automated ones which contain the invoice. Once shipped, send another
confirmation e-mail providing shipping details and tracking information.

5. When the shipping address is different from the billing address, try to confirm the information and exercise extra caution.

6. Many consumers ask for a chargeback when they do not recognize the
charge being made on their credit card statement. Thus, make sure that
your

company name and a clear transaction description will be reflected on their bill.

While these methods are ways for preventing fraudulent transactions and
for winning chargebacks, they are not sometimes enough in the real world
setting. This is because what causes most chargebacks is not fraud,
identity theft, processing errors or the like. What causes most
chargebacks is what is referred to as "friendly fraud."
What is Friendly Fraud?
From a merchant's point of view, there is nothing friendly or
pleasing about friendly fraud. Friendly fraud is an industry term which
refers to a fraud which results from a customer making a purchase with
his or her own credit card, receiving the merchandise and then filing
for a chargeback. This involves dishonest people who would like to keep
the merchandise without actually paying for it.

In the offline world, this is known simply as shoplifting or stealing,
and perpetrators rightfully belong in jail if caught red-handed.
However, this pattern ofbehaviour is tolerated on the Internet, thanks
to chargebacks. So, how can you prevent the occurrence of friendly fraud
chargebacks and avoid customers who only want take advantage of you?

First of all, here are four elements that you need to incorporate into
your transactions, to minimize occurrences of chargebacks:

1. Address Verification. You should decline transactions without a matching billing address.

2. Security Code. Your customers must provide the card security code found at the back of their card (aka the CVV).

3. Traceable Shipping Service. You should use only a shipping service
with a tracking system in place, preferably one which requires a
signature as receipt confirmation.

The first two are important to minimize fraudulent transactions not made
by the owner, while the third is important to refute an invalid
chargeback. A more detailed explanation of these will be found in
another chapter in this explanation.

For the meantime, let us look into the ways by which you can win a friendly fraud chargeback.
Truth be told, friendly fraud is one of the most difficult type of
chargebacks to process. The way you need to respond will depend on what
kind of claim your customer is making. Here are some of the common
claims made, and how you can respond to them:

1. Customer insists that the item was never delivered and that he or she
never received the product they paid for. In response to the retrieval
request, provide a copy of the transaction receipt, with matching AVS
and card code, a copy of the delivery receipt from the courier, or any
communication from the customer that indicates that they indeed received
said product.

2. Customer says that the item is not as described, or is not happy with
the purchase. This is one of the weakest excuses for coming up with a
chargeback. You should provide the same documents as mentioned above,
along with your refund policy and a statement which clearly states that
refunds are possible, as long as the merchandise is returned.

3. Customer insists that the item has been returned, yet the refund was
never issued. In this case, you should ask the customer for proof of
delivery to your return address. If the customer happened to return the
merchandise after the period covered by your return policy, provide a
copy of the policy.

4. Customer says that the order was cancelled but the merchandise was
still shipped. In this case, you will need to specify, in your selling
terms and conditions, that once an order is placed, cancellation is not
possible once the item has been shipped. You should provide the delivery
receipt, record of secure code, a copy of your return policy and a
statement welcoming return of the merchandise if refund is requested.

5. You have already issued a chargeback to the cardholder, yet the
customer disputes the charges. This may be the most frustrating for
merchants. These are made by those who obviously have ill intent. You
can opt to report these cases to your local police.

Most Frequently Asked Questions about Chargebacks
Know that chargeback is a complicated matter, and also that each case
is different from another. Here are some of the most frequently asked
questions on chargebacks. For more questions and information about the
intricacies of chargebacks, you can join http://www.chargebackforum.com/.



What do I do with a Chargeback Notification?

A chargeback notification simply tells you that your account has been
debited for a particular transaction. It should display information
about why such an amount was debited from your account. You should read
the notice carefully and then decide whether it is correct. If it is
not, you should immediately send the notification to the financial
institution, along with your supporting documentation.

If the issuing bank sees that your rebuttal is sufficient, the
chargeback will be reserved and the amount will be credited back to your
account.



What do I do with a retrieval request?

When you receive a retrieval request, immediately gather all of your
supporting information related to the transaction being questioned, and
then you can fax or send it to the credit card processor.



Why is the chargeback taken from my outstanding balance and not from my rollover reserve?

Remember that your reserve amount is set only for security purposes and
to protect you, as merchant, from losses caused by chargebacks. A
chargeback is usually taken out of your merchant account.



How will I know if the chargeback has already been deducted from my account?

You will usually be sent be a Notification of Chargeback as soon as the
debit is sent by your bank. The debit of this amount from your merchant
account will usually be the same day.



Why was there a chargeback issued to my buyer without a retrieval request

being sent to me?

Note that not all chargebacks require that the cardholder bank send a
retrieval request before a chargeback is initiated. Chargebacks that are
obviously deserved by the cardholder will be automatically issued
without consulting you, mainly because no consultation is needed.



Will I be charged for these chargebacks? How much?

When the credit card institution initiates a chargeback, expect it to
immediately be charged to your account. Typically, you should allot
anywhere from $50 to $75 for every chargeback filed. This fee will cover
all of the processing expenses. Reversing a chargeback in your favour,
on the other hand, will not cost anything.



How many chargebacks am I allowed a month?

When it comes to chargebacks, there is a certain limit provided by the
bank, which varies from one bank to another. The chargeback ratio is the
ratio between the number of chargebacks to the number of transactions
you have. The maximum ratio that a merchant should have is probably 1%
or less. If you happen to go beyond this limit, there is a good chance
that your merchant account will be closed.



How long does this entire process take?

The duration of the chargeback process depends on the reason why the
chargeback was filed. It can last anywhere from a month to about six
months.



What will happen after a chargeback?

Once a chargeback is filed, the amount to be reimbursed will be taken
from your account, plus the processing and penalty fees. If you provide
enough documentation to show that the customer did not deserve the
chargeback, then the amount taken from your account will be reimbursed.



What is the first thing I have to do when I receive a chargeback?

The best first step after receiving a chargeback is to contact your
customer about their concerns. If both parties are amenable to coming to
a mutually agreeable solution, then you would avoid going through the
usual chargeback process.
Chargebacks and Third Party Billers (Such as DalPay)
Third party credit billing has gained popularity in the recent years.
It has been most especially convenient for those who operate businesses
without needing a merchant account. Services such as DalPay offer
merchants the ability to accept credit cards for payment, without having
to get an actual merchant account. These are great solutions especially
for small businesses that are just starting out.

There are a good number of advantages you can get when you hire third party

billers:

- The versatility. Third party accounts process a wide number of credit
and debit cards from different banks and credit institutions. This means
that they support about three times more clients than what will be
possible with an individual merchant account.

- The savings. Unlike merchant accounts, third party processors
generally do not require monthly fees. They do, however, charge a set up
fee and

transaction fees.

- The instant statistics. Third party billers can provide instant
statistical information on your transactions, which are updated in real
time. These statistics are helpful, as they can help improve your
business if used properly. Third party payment processors take charge of
the whole purchasing process. This would usually include the shopping
cart feature, credit card authorization and fraud protection, customer
services and even billing inquiries. You simply have to integrate the
third party biller's link into your site and the customers are taken to a
safe and secure form, hosted by the third party service. Once an order
is confirmed, you are notified, usually via e-mail. Your responsibility
then will only be to ship the order to the specified mailing address.



What happens when buyers file a dispute? When problems with purchases
occur and buyers file complaints, third party processors simply perform
their

duty as the third party. In the case of DalPay, we have a system in place wherein the buyer and the merchant can post messages

to each other to find ways to solve the problem.

When the dispute is not solved this way, a buyer may escalate the
complaint against a seller. When this happens, DalPay takes charge of
determining whether the buyer duly deserves a refund or not.
How do third party processors help as far as chargebacks are concerned?
Some buyers do channel their complaints to their credit card company,
which can lead to a chargeback. Upon filing the complaint, the credit
card company notifies our merchant bank regarding the chargeback and
debits the needed funds from them. After which, DalPay

places the necessary funds related to the chargeback on temporary hold from the seller's account.

At this point, the third party processor immediately notifies the
merchant and asks for documents and additional information, which they
can use to dispute the chargeback. If the credit company decides that a
chargeback is not deserved, the third party biller will immediately
deposit back the debited funds into your account. This entire process
can last anywhere from 75 to 100 days.
Myths to Dispel about Chargebacks and Third Party Processors
There have been many claims that third party merchant accounts do not
have corresponding chargeback fees. Yes, there are quite a number of
third party billers which, indeed, do not ask for chargeback fees. This
allows merchants to save quite a lot on chargeback-related expenses.
However, there are also third party processors that do not support both
chargeback fees as well as refunds.

Instead, the merchant is expected to initiate the refund and give it directly to the customer.

Still, there are a number of third party processors that do not impose
chargeback fees. However, if you look at their rates you will see that
they have higher processing fees - high enough to actually cover
chargeback costs. So, it is best that you look at their terms and
conditions, know their rates and determine how their processes and
offers work, before signing up.



As far as chargebacks are concerned, there is only one thing new worth
mentioning in relation to international transactions. Chargeback fees
for international transactions have augmented rates to cover the
increased expenses for communication and correspondence.

For credit card companies, if no verification means are used, the only
option to recover the fees will be to contact the local law enforcement.
However, note that the lack of fraud measures worldwide has set many
fraudsters running and going elsewhere for more. Moreover, once there
are product disputes (whether or not the transaction was fraudulent),
there might be very slim chances of re-covering the payment and fees
involved in the transaction.

If you are a small business and you operate with slim profit margins,
unless you are really sure about the authenticity of the transaction, it
may be wise to avoid international transactions altogether. The risk
may be way too much to tolerate.
Consider these tips to avoid potential Retrieval Requests and Chargebacks:
Duplicate transactions

Ensure that transactions/orders are only made once. Entering the
same transaction more than once (by customers pressing the back button
or clicking on the CheckOut button more than once), can result in
"duplicate transaction" Chargebacks.Refund policy

Your refund policy should be clearly visible on your website. Make
it a requirement that customers read the policy before their order can
be processed.Refund in a timely manner

Failure to process credits in a timely manner can result in
Chargebacks for "credit not issued." Also inform your customer on how
long it will take before the refund will hit their account.Cancelling a rebilling

If a customer requests cancellation of a recurring transaction which
is billed periodically (monthly, quarterly, annually), always respond
to the request and cancel the transaction immediately or as specified by
the customer. As a customer service, advise the customer in writing
that the service, subscription, or membership has been cancelled and
state the effective date of the cancellation. Failure to respond to
customer cancellation requests almost always leads to Chargebacks.Contact information

Your contact details should be clearly visible on your website.
Including a physical address and a telephone number, so not just an
email address or contact form.Shipping policy

Your shipping details should be clearly visible on your website. If
your customer knows when they will receive their product they will not
issue a Chargeback because they feel 'it has been too long' and they
'should have received the product by now'.Order status update

Keep customers informed on the status of their order.Delay in shipping

If the merchandise or service to be provided to the cardholder will
be delayed, advise the cardholder in writing of the delay and the new
expected delivery or service date.Out of stock

If the merchandise ordered by the cardholder is out of stock and
delivery will be delayed or this item is no longer available, advise the
cardholder in writing and offer the cardholder the option of purchasing
a similar item or canceling the transaction. Do not substitute another
item unless the customer agrees to accept it. By giving the customer
notice and the option to cancel, you may help avoid a customer dispute
regarding the merchandise and a possible Chargeback.DBA on customers' statement

Use a clear DBA (Doing Business As) name that customers will
recognize. Vague corporate names that do not accurately describe what
your company might do or sell will only confuse customers when they
review their billing statements. An unrecognized DBA name on billing
statements is one of the most common causes of Chargebacks. Inform your
customers on your website what the billing name on their statement will
be: "Please note: Our billing name on your statement will be: ..."Phone number on customers' statement

Put your phone number on your customers' statements. If they do not
recognize your DBA, they can call you to find out who you are and why
you charged them.Responding to a Retrieval Request

Always respond to a Retrieval request as quickly as possible. A
limited amount of time is available to resolve a dispute. If you miss
the window of opportunity to respond, you forfeit your ability to fight
the Chargeback. If your processing bank has any more questions or
requests, your quick response will ensure that they have enough time to
get the relevant information from you.Customer satisfaction

Some disputes are not the result of unauthorized credit card use.
Rather, they start because the customer disputes the quality of the
goods or services purchased. The best way to avoid this type of
Chargeback is to work closely with the customer to establish a mutually
satisfactory solution.Contact suspicious orders

Call, fax or email any large or suspicious orders
to ensure the order is legit. If you are unable to reach the customer,
you might have intentionally been given incorrect contact information.
Issue a refund to prevent a Chargeback by the credit card holder.High-ticket sales/Fast delivery

Be suspicious of high-ticket sales requested to be sent next-day air
or if a runner will be in to pick up the purchase at a later time. Be
wary of orders for which the customer is willing to pay more for faster
delivery.Verify the customer's address

It is possible to verify the customer's name, address and phone
number with the card-issuing bank. By calling the Voice Authorization
Center for address verification, you can verify the address and also
provide proof that you verified the address.Always get signed proof of delivery

Be able to provide a shipping tracer log that shows that the customer received the shipped goods.Product information on website

Provide accurate descriptions and images of your products on your website.Foreign orders

Be very cautious of any foreign orders. Generally, orders from Asia,
the Middle East, and most parts of Africa are considered high-risk.Different billing and shipping address

Be wary of orders with domestic billing addresses and foreign shipping addresses. They are usually fraudulent.

It runs different if different banks, states and countries and depending if you work with a lawyer and the federal consumer protection agency it can go as long as 30 days to 2 years depending on the situation.
- I don't know where you are getting your information, or if you are just making this up to try and deflect your responsibility in this.  But laws are not bank specific.  Laws don't change for people that have a lawyer or work with any Federal agencies.  And for this report's sake we all appear to be in the United States.

So please post the specific law that states you have 2 YEARS to dispute a transaction.

The national Credit Card Act does not differ in different states. Bank policies and the opinions of attorneys are not the law. I challenge you again to provide a link to a web site that supports your claim, "By law the cardholder has two years to file a dispute. Your sales can be reversible for two years."

It runs different if different banks, states and countries and depending if you work with a lawyer and the federal consumer protection agency it can go as long as 30 days to 2 years depending on the situation.  Do some research on the web and ask your attorney. Then I would be happy to discuss with you afterwards.

"By law the cardholder has two years to file a dispute. Your sales can be reversible for two years."

Please provide a link to a web site that supports your claim. I look forward to reading about this law you have revealed.

By law the cardholder has two years to file a dispute. Your sales can be
reversible for two years... That means saving documentation for two
years... Most banks will have a policy against handling disputes that
are more than six months old but if the cardholder pushes it they have
two years to file a dispute.

You got very lucky that they did this.  Based on your statement it
appears that at least some of  your fraudulent activity was more than 60
days old.  Which is the farthest the bank is required to accept
disputes on.  So even getting back 1 penny of a dispute over 60 days is
more than they are required to do and you should consider yourself
lucky.

Understanding Charge back rules:
By law the cardholder has two years to file a dispute. Your sales can be
reversible for two years... That means saving documentation for two
years... Most banks will have a policy against handling disputes that
are more than six months old but if the cardholder pushes it they have
two years to file a dispute.

But you don't stop there.  You then get them to refund you the $20/month
for 30(that is OVER two years).  Yet even though they refund all of
these things it doesn't appear that they needed to do, you are writing a
RipOff report on ONE "fraudulent" from over a year ago.  Oh and on the
"fraudulent" charge..I would bet that this falls into the same pattern. 
You signed up for a "free" month and didn't follow up or cancel the
agreement as you were supposed to.  After all if you did..AND you were
diligent with your accounts you would have reported it to the bank at
the end of 2011 not 2012.

In our contract with Citibank they stated that if we move our business account to their bank they would give us a FREE personal checking account as long as we keep our business account active.  So, they breach the contract, so in my opinion that's fraud. And we have every right to demand the money back.  But we will verify this with a lawyer who handles class action lawsuits.  I bet there is lots of consumers out there that had or having the same issues.  more to come...



Oh and as for the bank not wanting you as a customer.  They have a right
to close your account and they don't have to give a reason.  But I
would almost guarantee that the reason isn't because of your dwindling
balances.  It probably isn't even because of the fraudulent charges. It
is because YOU took so long to bring it to their attention that they
probably are thinking you are an increased risk that they are no longer
willing to take.

This is not the case and we have paid our dues if we were at any fault.  We will take it to the local and federal government to see if we can change and regulate these business practices.  Current we have been in contact with appropriate agencies and local and federal senators and congressman.


- Actually perhaps some of your "financial hardship" was due to the fact
that you don't pay attention to your accounts.   Someone who waits
until tax time to review their accounts is not managing their accounts
correctly.  If you don't do the simple act of balancing your account
MONTHLY..who knows what else you are not doing to manage your
finances.    Just something for you to think about.

I agreed to certain aspect.  We do download all transactions into our banking system.  However our financial hardship is do to the lack of work in this country.   Maybe the tarp money should of gone for job creation instead of the banks. 

It is the account holder's responsibility to reconcile their checking account monthly. It is evident that you did not do that because you were unaware of unauthorized charges over a two-year period. Banks require that the account holders file a dispute within 30 or 60 days of the statement date or within 90 days of the charge date. Citibank has been more than fair in crediting your account for most of those charges. You should have reported the lost or missing debit card to the bank. (Yes, even if you think it's in the house). You have exercised a degree of irresponsibility and should have accepted any compensation they offered you.

They have the right to refuse your business so shop for another bank.

A few months later, while reviewing my bank statements for the year while preparing my taxes, I noticed numerous fraudulent charges on my account.
.......
Based on all of these problems, my husband and I took it upon ourselves to very diligently go over all of our statements for the last two years to make sure that additional activity was not missed as it seemed much unknown or unrecognized fraud was being done on our account. So far,all fraudulent activity has been addressed by Citibank except for a charge from ancestry.com on 11/23/11 which they are claiming is too old to rectify.
- You got very lucky that they did this.  Based on your statement it appears that at least some of  your fraudulent activity was more than 60 days old.  Which is the farthest the bank is required to accept disputes on.  So even getting back 1 penny of a dispute over 60 days is more than they are required to do and you should consider yourself lucky.

But you don't stop there.  You then get them to refund you the $20/month for 30(that is OVER two years).  Yet even though they refund all of these things it doesn't appear that they needed to do, you are writing a RipOff report on ONE "fraudulent" from over a year ago.  Oh and on the "fraudulent" charge..I would bet that this falls into the same pattern.  You signed up for a "free" month and didn't follow up or cancel the agreement as you were supposed to.  After all if you did..AND you were diligent with your accounts you would have reported it to the bank at the end of 2011 not 2012.

Oh and as for the bank not wanting you as a customer.  They have a right to close your account and they don't have to give a reason.  But I would almost guarantee that the reason isn't because of your dwindling balances.  It probably isn't even because of the fraudulent charges. It is because YOU took so long to bring it to their attention that they probably are thinking you are an increased risk that they are no longer willing to take.

Although I cannot state this with certainty, but my opinion is that as our bank account balance has lessened over the last three years due to financial hardship
- Actually perhaps some of your "financial hardship" was due to the fact that you don't pay attention to your accounts.   Someone who waits until tax time to review their accounts is not managing their accounts correctly.  If you don't do the simple act of balancing your account MONTHLY..who knows what else you are not doing to manage your finances.    Just something for you to think about.