Question about Credit Card Fraud

[jamison]

Say someone steals a credit card, and uses it. The rightful owner finds out, and disputes the charges made on the credit card, they get their money back.

Now the question is, who has to suffer the penalty for the fraud? The credit card company or the merchant where the stolen card was used???

Your knowledge would help since a friend of mine who owns a business just got ripped off, he delivered the item and then the charge was disputed and he is out the money at least for now.

 

[PsychoAndy]

usually the merchant

 

[chiwawa626]

The credit card company.

 

[jamison]

Hmmm...two seperate answers.

I'll give more details, maybe it will help.

The order was for a total of around $4000, $2000 was disputed. He accepts credit cards through a third party company, meaning he doesnt have a real merchant account. He said it passed all of the verification steps, AVS same shipping/billing address etc.

 

[PsychoAndy]

electronic transaction thru a third party? kiss your bucks goodbye. the only way you can get the CC company to eat it is if:

you have an actual merchant account
you have an itemized statement proving delivery and that SOMEONE authorized this charge IN WRITING

THIS is why so many people, myself INCLUDED take an aversion to accepting credit cards electronically.

Sure, its easier for the consumer 99% of every transaction, but it's that 1% just may become 99% of my profits.

 

[RossMAN]

Why not call your cc and ask them?

Interesting question BTW.

 

[NogginBoink]

Ususally the merchant loses out.

I've known people who've had to stop accepting CC's at their businesses due to the amount of fraud. The CC company charged the fraud amount back to the merchant.

 

[db]

Why would 1/2 of it be disputed? Something wrong there.