topic Re: Discover Refuses to Admit Fraudulent Charge in Credit Cards

Discover Refuses to Admit Fraudulent Charge

MarcusCrassus — Fri, 05 Jun 2015 09:05:42 GMT

I recently noticed a fraudulent charge on my Disover Card and promptly reported it. The item was purchased online from a merchant I have never bought anything from before and sent to someone on the other side of country.

Discover, however, did its investigation and claims that the charge is valid because the fraudster had my credit card # and billing address (which could have been obtained from any number of security breaches) and is therefore holding me 100% liable for the charge (so much for their claim about $0 liability for fraud). How the heck does Discover expect me to prove that the charge was fraudulent? Find the fraudster and have him confess in their corporate office? The dispute is also going on my credit report (though creditors apparently are not supposed to use this against me).

Does anyone have any information on how I might go about disputing the charge any further? Thank you for any help that you can give.

Re: Discover Refuses to Admit Fraudulent Charge

Anonymous — Fri, 05 Jun 2015 08:11:25 GMT

Wow. I am so sorry to hear that you are going through this nonesense. I really hope that the members of the forum can give you better advice than me and help you resolve this.

Did you try calling back and maybe finding a more reasonable representative?

Re: Discover Refuses to Admit Fraudulent Charge

MarcusCrassus — Fri, 05 Jun 2015 14:36:12 GMT

I've talked to several people and sent Discover a letter. I've even filed a complaint with the Consumer Financial Protection Bureau. It's just that Discover's own investigation seems to be all that's necessary for them to deny a fraud claim. I don't know if Discover in particular is more likely to deny fraud claims. I've had other card numbers stolen several times in the past and those other CC companies have not held me liable for any fraudulent charges. Regardless, it should serve as a warning to everyone:

Do not take claims about $0 liability for fraud at face value.

Re: Discover Refuses to Admit Fraudulent Charge

jsucool76 — Fri, 05 Jun 2015 10:31:38 GMT

how much was the charge for?

I don't hear about stuff like this often. most lenders are very quick to simply say "yes we'll take it off"

Re: Discover Refuses to Admit Fraudulent Charge

Platinum — Fri, 05 Jun 2015 11:32:48 GMT

This is not first time I hear stories like this about Discover and Discover only. That's why I've got rid of them for good. They often side with fraudsters/ merchants.

Re: Discover Refuses to Admit Fraudulent Charge

Blodreina — Fri, 05 Jun 2015 11:53:04 GMT

Wow. I've never heard of this happening; like someone else said, CCCs typically seem to be prompt in removing unauthorized charges. Honestly, that would be grounds for me to consider closing it. What if it happens again in the future?

Re: Discover Refuses to Admit Fraudulent Charge

Platinum — Fri, 05 Jun 2015 12:04:28 GMT

I am here for almost 10 years. There has been several stories shared, this is just one of them. I hope it's OK to post the link.

http://ficoforums.myfico.com/t5/Credit-Cards/Discover-disputing-a-transaction/m-p/2213053/highlight/true#M618440

Re: Discover Refuses to Admit Fraudulent Charge

bz386 — Fri, 05 Jun 2015 12:22:32 GMT

By law you are only liable for up to $50 and the burden of proof is on the credit card issuer. (I am not a lawyer, so take this with a grain of salt)

https://www.law.cornell.edu/uscode/text/15/1643

Re: Discover Refuses to Admit Fraudulent Charge

barbaralee — Fri, 05 Jun 2015 12:31:30 GMT

Need more info.

How does the Discover process work? When we work Visa/MC disputes and the merchant comes back with strong proof that the cardholder participated in the claim we allow the cardholder to respond within XX amount of days. Does Discover not allow you to respond to what the merchant said?

What kind of product was it?

Was it a store? Something purchased online?

Sorry, but working in disputes I've seen all types of people claim "fraud". The vast majority really are fraud, but a layman's terms of what is fraud vs. what is not is very skewed. Not saying this was the OP's case, but it sounds like whatever investigation they did (which usually has a lot more to do than an address match) supports that he or someone in his household somehow participated in the transaction.

The only other thing would be required paperwork not turned in.

But I am not familiar with the way Discover disputes work, I am assuming it is similiar to Visa/MC.

Re: Discover Refuses to Admit Fraudulent Charge

Anonymous — Fri, 05 Jun 2015 12:31:17 GMT

@Platinum wrote:
I am here for almost 10 years. There has been several stories shared, this is just one of them. I hope it's OK to post the link.

http://ficoforums.myfico.com/t5/Credit-Cards/Discover-disputing-a-transaction/m-p/2213053/highlight/true#M618440

never a problem posting a link from past threads here.

Re: Discover Refuses to Admit Fraudulent Charge

red259 — Fri, 05 Jun 2015 12:40:01 GMT

@Platinum wrote:
This is not first time I hear stories like this about Discover and Discover only. That's why I've got rid of them for good. They often side with fraudsters/ merchants.

I had a situation where someone opened up a discover card in my name using an address associated with me. I was able to get the card cleared up as fraud without any problem at all and found discover to be a million times better than when I had the same situation with Chase, so it makes me wonder if there is more to the story.

Re: Discover Refuses to Admit Fraudulent Charge

MarcusCrassus — Fri, 05 Jun 2015 13:03:21 GMT

As I noted in the OP, the merchandise was purchased online (an electronics item).

Unless the merchant is complicit in the fraud, how would the merchant know that the transaction was fraudulent? All it takes is the card information and billing address in order to buy something online, and from the information report that Discover sent, that is major basis for their conclusion that the transaction was not fraudulent (the report did cite as a risk factor for fraud the fact that the item was not mailed to my billing address).

I further note that when I reported the fraudulent charge, I asked that the card be cancelled immediately, but they said that it was not necessary at the time, but I have since insisted that they cancel the card as I have no confidence in their procedures, which may or may not be similar to those of VISA or MC. Anecdotally, there does seem to be some difference in the way that Discover handles fraud claims.

Re: Discover Refuses to Admit Fraudulent Charge

Anonymous — Fri, 05 Jun 2015 13:10:43 GMT

Wow.. Sorry to hear. You'd think the the measures they take to prevent fraud will make filing one soo much easier. Thats terrible..

Re: Discover Refuses to Admit Fraudulent Charge

Anonymous — Fri, 05 Jun 2015 13:57:48 GMT

You just made me happy about my $500 limit on my Discover. Now I know that's the worst I may lose if there is fraud.

Re: Discover Refuses to Admit Fraudulent Charge

Callandra — Fri, 05 Jun 2015 14:48:17 GMT

Was the name on the order the same as yours? (Ie- did the person have your name as well as the card info?) If it was or was close, that might be the reason Discover is siding with the merchant (I work for an online business and except in cases where we have refunded the order, we NEVER win disputes. Never had a Discover one though, 99% are Visa/MC).

Also, if the dispute is closed, that is it. You cannot re-open a dispute (not sure about Discover, but for Visa/MC, there is always a timeframe for the cardholder to respond if it is not in their favor; did you get paperwork from Discover about it? Did they initially give you the credit? Almost sounds like there wasn't much of an investigation). How much was the charge for?

Re: Discover Refuses to Admit Fraudulent Charge

Anonymous — Fri, 05 Jun 2015 14:57:42 GMT

Someone could call Discover and ask them about the fraud program. I would but I'm at work right now. This is concerning.

Re: Discover Refuses to Admit Fraudulent Charge

MarcusCrassus — Fri, 05 Jun 2015 15:51:27 GMT

Yes, the merchant had my billing information including my name (though the phone number was wrong and the email address was not one that I use). I received the paperwork from Discover and the "proof" consists entirely of data from the merchant detailing the transaction and item delivery. In fact, Discover admitted that their decision was based only on that information: "Based on information we received from the merchant, the transaction appears to be valid." The charge (which was temporarily reversed) was over $50 so I'm out of luck (CCs apparently don't usually bother wasting resources fighting fraud claims that are less than $50).

Re: Discover Refuses to Admit Fraudulent Charge

yfan — Fri, 05 Jun 2015 15:29:03 GMT

This indeed is very disconcerting. There might be a technological way of proving the fraud though:

Contact the merchant that shows on the transaction and ask them to turn over to you the IP address from which the order was made. You might have to get their tech department for this.
Run the IP address through any number of online services that can determine where (approximately) the IP originated from - the physical location.
You can then prove that you were never in the area on the date in question in a number of ways: if you have an Android smartphone and it has location services on (for weather or whatever), it can give you a pretty good record, or your physical (in-store) CC transactions around that date should also clear up that you were never in the locaiton where the IP address came from.

This would be proof that you didn't authorize that transaction.

Re: Discover Refuses to Admit Fraudulent Charge

yfan — Fri, 05 Jun 2015 15:34:07 GMT

@MarcusCrassus wrote:
Yes, the merchant had my billing information including my name (though the phone number was wrong and the email address was not one that I use). I received the paperwork from Discover and the "proof" consists entirely of data from the merchant detailing the transaction and item delivery. In fact, Discover admitted that their decision was based only on that information: "Based on information we received from the merchant, the transaction appears to be valid." The charge (which was temporarily reversed) was over $50 so I'm out of luck (CCs apparently don't usually bother with fighting fraud claims <$50).

I'm sorry, are you saying the charge was OVER $50 or UNDER $50? This may make a legal difference because the law does hold you responsible for up to $50 in fraud. Secondly, how long after the charge was made did you notice and report it as fraud? The law limits liability to $50 if reported within 2 days, to $500 if reported after 2 days but before 60 days, and doesn't limit at all if reported after 60 days.

Re: Discover Refuses to Admit Fraudulent Charge

MarcusCrassus — Fri, 05 Jun 2015 15:38:05 GMT

I checked the IP address and one of the various locations associated with it (odd that the locations are all over the country) is reasonbly close to my town, but I was reading another forum and the person claimed that it's not too difficult for fraudsters to "masquerade a transaction as coming from the geographic area of the account holder's residence." And because of that it would make it that much more difficult to prove my actual location since the purchase was online, not in a B&M store.