I should also add, that in a previous business that I owned I had 2 situations like this. I don’t know if the card issuer told the customer to return the merchandise or not, but in both cases I send them to collections. One customer paid me, the other one went to court and I got a default judgment. I never collected on the judgment. But, we are talking an item worth between two and $3000, so it was a fair chunk of change for me to pursue.
Again, IANAL but how would you have responded if either of those people disputed their debt under FDCPA and asked for evidence of the debt? The original purchase receipt would have shown the customer paying for the items with CCs and if they had won the chargebacks, they could then produce evidence of that. If you then invoiced them again for the same amount, what would you have used to prove that the customer had agreed to incur this new debt?
I'm not trying to attack you but I'm genuinely curious about how a merchant can legally handle this and how customers can protect themselves in such cases.
Edit: on further reading it is indeed true that merchants generally retain the right to pursue payment from the customer even after losing a chargeback and, if sued, the customer would then need to defend themselves adequately to prevail. However, I can't seen to find any information on whether specific merchant agreements contain any language that prohibits such or mandates arbitration with the CC company instead.
Was the product clearly defective or damaged, or were you dissatisfied with it.
There is a legal distinction between goods that are not received or improperly billed or damaged, which are covered as billing errors under the Fair Credit Billing Act, and goods for which the consumer states dissatisfaction, which are covered as a "charge back" by the credit card company.
Was the dispute legally resolved as a billing error under the FCBA, or more broadly as a charge-back based on dissatisfaction?
I owned various retail businesses in various markets for over 20 years and I never once "lost money" on a credit card dispute, namely because I kept very convincing paperwork and the people doing disputes didn't.
100% of collections I assigned to a local collector were paid in full very, very quickly.
Average item or service disputed was around $1500 with some as high as $6000 -- and in 100% of the cases, either the credit card company found in my favor or I knew the courts would when I filed a lawsuit.
When I've DONE disputes against vendors, I keep it all in writing, CMRRR, and give them a small amount of time to respond before I take "legal action" which includes disputing with a credit card company. So if they want to send me invoices, that's fine, but they'll be pretty perturbed at their legal or arbitration costs if they wish to pursue!
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Thank you everyone for all your responses, much appreciated!
I have my paper trail in order, not worried. Was genuinely curious if anyone had gone thru anything similar. Thank you to all who participated. Have a great day!
Mods, go ahead and lock this up.