Case Study – Cash Chargeback For Online Credit Card Purchase

I see myself as a pretty savvy consumer. I’ve worked a couple of years as a merchandiser for a global retailer, I have a level of technological and internet knowledge above the average Joe, and now that I think about it, I actually spend more money online than off it. So I really believed that it would take one hell of a long shot for a thief to scam my money.

And this overconfidence was probably what led me into becoming a victim.

On a hot summer day when I was wandering around on a reputable classifieds site, I came across a listing offering to ghost write 250 pages of content for $525. For about 500 words a page, it will come up to a total of 125,000 words. I didn’t have an immediate need for this service but felt that it was a pretty good deal. I felt that even though I cannot expect the quality of the work to be world class, I could use it as a skeleton for writing a book on a topic I’ve always wanted to tackle.

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I’m pretty wary of buying digital services online. On top of that, this seller was from India. Even though a lot of stories have been going around the internet about scammers from India, I decided not to let that cloud my judgment. But that does not mean I will skip the little due diligence I can do.

So I reached out to this writer who wrote pretty well from the correspondence. It turned out that he is a freelancer. Even though $525 is not a small amount, it is a low price considering the market prices that more established writers are charging for ghostwriting. Moreover, $525 is a pretty big amount for someone in India, which explains why he was willing to work for such prices.

A small sample order should be able to determine how well-organized and efficient this writer was. So I arranged for a small order of 5 pages of writing on a general topic.

Right place at the right time

The resulting work was solid and delivered within 24 hours. This really impressed me. I was thinking that I was just at the right place at the right time. The writer had no other projects, capable writing skills, charging a low price, and I happen to maybe be the first to hire him since he put up his listing.

It really looked like a no-brainer at that point. So I paid via an online payment processor with a credit card after agreeing to a weekly delivery schedule whereby a certain writing target should be reached weekly. The completed work will then be sent to me. This at least allows me to slowly recoup the investment I have made upfront. Little did I know that it was the start of a nightmare which still affects how I purchase stuff online today.

I received nothing on the first delivery week. I felt that it was nothing to be worried about since writing assignments seldom finish on time. I can be flexible with some leeway. No problem. The writer explained that he was still in the process of researching. He was easily contactable and there was no reason to panic at this point.

But when I still received nothing on the second week, my scam-meter went berserk. I was unable to get him to reply to my emails or reach him on Skype. This was when I decided that this writer is not reliable and demanded a refund. The sales page of his listing did mention a full no-questions-asked refund should he fail to deliver on time.

So I sent him an email asking for a refund knowing that he would read it. It was then that he connected with me on Skype to explain that he will send the work by the end of the day. I was partly skeptical but decided to wait it out. The next day, his computer broke down and he unable to extract the files inside. My work was done. It was just a matter of extracting them. It was this time when I was certain that I would not be getting my work at all.

Last chance

I gave him 1 last chance and informed him that if I don’t receive the outstanding work within 3 days, I want a refund. He failed to deliver again.

I insisted on a refund citing his refund guarantee. He refused.

So I contacted the payment processor to dispute the charge feeling very certain that they would rule in my favor. The payment processor have a notorious reputation of consumer protection. It was a pretty straight forward case in my opinion. I cited the refund guarantee as well and have made a copy of the page stating that. To my amusement, after filing the dispute, I went back to the web page hosting the sales letter and found that the refund guarantee had been removed.

Wow. This was when I realize that this was a scam from the start.

The horrifying part came when the payment processor came back to me in a few days rejecting my claim stating that they offer no protection for digital services. And a writing service is classified as a digital service. I might have let the matter go if the transaction was a mere $5. But this was over $500 we are talking about. Anyone who fails to respect that kind of money needs to get their head checked. I was livid and called them up in person.

Because I used a verified business account with them, my issue probably had a little more weight than the regular account. The staff told me nicely that they could not rule in my favor due to their internal policies and guidelines. BUT I was advised to take the case to my credit card company. Which was what I did.

I have to admit that at that point in time, it didn’t came across my mind to initiate a chargeback. Maybe it was the anger that got the better of me. I was already billed for the transaction and had made payment to it early on. I’m glad there were nice people pointing me to that direction even when they could not help me from their end.

Calling the credit card issuer

It was close to a month since the purchase was made when I made the call. I was expecting a humbling lecture from the helpdesk about the safe use of credit cards because I was really being a little foolish to make such a purchase online. But what I got turned out to be a very helpful and empathizing tone on the other end of the line.

The charge was immediately given a temporary reversal pending the findings of their investigation. I was then sent a physical package in the mail with documents needing my endorsement. I explained my story and why I felt that it was a fraud. And included all the printed documents which I had collated when conducting my due diligence. I packed them into a package and sent them back to the investigative officer taking on the case. If you are wondering, I did make a copy of the sales page when it still contained the refund guarantee.

A month later, I received a new package containing the lame excuses which the merchant gave the investigator. Basically, there was no delivery. So he had little to aid his case. His response was basically a tirade of strong language cursing the world of his problems.

The purpose of this package was for the bank to ask whether after seeing the merchant’s response, I would still like to proceed with the chargeback. Of course! I repeated my story without getting emotional and requested that they proceed.

It took about 6 months after the initial call to file a chargeback when the reversal was finally converted to a permanent one.

I must say. Even though I felt that there was little chance of me losing the case, the thought of losing $525 for being stupid lingered in my mind all the time.

Tips in disputing credit card charges

From this experience, I’ve got a new found confidence in how serious banks are at protecting the regular consumer. Here are the main takeaways to protect yourself should you run into an unfortunate online transaction in future.

1) Document everything

If you are already aware that you are making a purchase with a merchant you are not 100% confident of, make sure you have a snap shot of everything possible. These include:

Website you are buying from

Actual sales page which is selling the product

Correspondence via email, instant messaging, Skype, etc.


2) Try to settle with merchant

For me, the moment I have to get to this stage, I want my money back. But that’s just my personal preference. Depending on your circumstances and personal preference, you might prefer to get the merchant to actually deliver on what you bought. Sometimes legitimate sellers get into genuine problems that leave them unable to deliver a sale within a given time frame. They might really just need a little more time to get back on track.

No matter what the case, you should at least attempt to mitigate the dispute and document them. This is because the staff at credit card companies have to handle hundreds of cases each day. So they might have an internal guideline on what criteria has to be met before they step in and move forward with an official chargeback. And one of those criteria could be whether you have made any attempt to resolve the dispute with the merchant.

So as long as you have attempted to seek a resolution and have it documented (for example, email correspondence), you will meet that criteria to move forward.

There is also a time period within which you have to log in a chargeback dispute after purchase. It usually lies within 90 to 180 days depending from bank to bank or card to card. If you quickly try to resolve your dispute and realize that you will not be able to reach an agreement, you can quickly call up the bank to lodge your complaint.

3) Call your bank immediately

Once you have decided to file a chargeback on your credit card, call you bank immediately to do it. Banking hot-lines operate for 24 hours these days. Don’t worry about having to wake someone up from bed. Call centers all over the world handle service calls. There will surely be someone on official duty who will be attending to your call.

You want to lodge your complaint as soon as possible so that they can work on your case immediately. The other reason is so that you will not have to put yourself in a dilemma of whether to do it or not. Sometimes when you delay and spend some time thinking over it, you might stop yourself from going ahead with it. Just do it and let the bank deal with it.

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