Credit Card Chargebacks

[instantcashbiz]

Please bear with me, this is a lengthy post.

If a U.S. online payment processing company (similar to Paypal) wants to sue an International resident for placing chargebacks on an online credit card transaction, is this a fairly straight forward procedure for them? This is by the way, a very complicated case which involves thousands of consumers investing in various online businesses, and is getting a lot of media coverage.

Here is a quick overview:

The payment processor in question, has frozen the funds of various online vendors alleging that they are operating illegal businesses. Because of this, literally millions of dollars are now unaccessible to thousands of consumers and businesses all over the world, and many of the consumers involved are doing chargebacks with their banks and credit card procesors to recover their losses. The company states in their terms and conditions that chargebacks "will be considered fraud and proscecuted to the full extent of the law."

However, the payment processor in question, has a sorted past at best, including being issued (under a different company name) a cease and desist order in 2003 for, ironically, promoting a ponzi or pyramid scheme. They have also in the past week been reversing charges on many peoples bank and credit card accounts without authorization, and have also been caught stating bold faced lies to the media regarding this case. At this point many government agencies are now involved including the FBI.

The payment processing company has also just conveniently changed their policies and procedures without contacting their membership, OR giving them a prompt when logging into their website:

From the MMG Forum:

headystuffFeb 9 2006, 02:53 PM

I recorded their TOS on Monday, Feb 6, and this was #14:

14. Privacy. We do not sell or rent your personal information to third parties for their marketing purposes without your explicit consent and we only use your information as described in the Privacy Policy. We view protection of users' privacy as a very important community principle. We understand clearly that you and your information is one of our most important assets. We store and process your information on computers located in the United States that are protected by physical as well as technological security devices. We use third parties to verify and certify our privacy principles. If you object to your Information being transferred or used in this way please do not use our services.

Compared to the mysterious NEW #14:

14. Funds Recovery: By using the withdrawal method of sending funds to your US Bank Account, you authorize StormPay to retrieve any funds that were paid to you and then charged back by the purchaser for any reason if the funds cannot be retrieved from the users StormPay account, or collected from the original purchaser. If you received the withdrawal by check, you understand that the defecit amount can be turned over to a collection agency for collections. It should also be noted that reversing the funding method (ie. chargeback) used to fund your StormPay account is considered fraud and will be prosecuted to the fullest extent allowable by law, as well as your StormPay account will be terminated.

20. Changes or Updates to StormPay's User Agreement: StormPay Inc. reserves the right to change, modify, or update it's User Agreement at any time without prior notice. Anytime any changes, modifications, or updates are made to the User Agreement, StormPay will prompt users upon account log in to review the terms of the User Agreement before proceeding. If at that time you do not wish to agree with the changes, modifications, or updates, you should not proceed and contact Stormpay Inc. by clicking the "contact us" link found at the bottom of any StormPay webpage for account closure. By clicking "I agree" and continuing into the account, you are consenting that you agree with the updates or modifications to the user agreement.

So getting back to my original question. Can this company proscecute consumers from anywhere, including other countries, as stated in the TOC, and/or is this likely to happen? (Keep in mind they would have to proceed with hundreds of lawsuits based on the number of chargebacks that have already occured).

I have a lot more info on this case and have just touched on it here.

[seniorjudge]

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