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Credit card company is holding me responsible for a charge on a stolen card.

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theGWS

Junior Member
Washington State

In 2000, someone from outside the U.S. bought parts from my sole proprietorship with a stolen credit card. Before shipping the merchandise, I called my merchant services provider to get an authorization for the charge. I got a verbal authorization that the pending charge for approx $3,200.00 was legit (ie: the address I provided matched the card's billing address). I also took down the authorizer's information (name, ext number).

The next month, the merchant provider tried to take the money from my bank account citing that the purchase was made with a stolen credit card. I contested this by giving them the information of the person that verbally authorized the charge. They denied this and said nobody by that name or extension number works at the company. I then closed the bank account so they couldn't take the money.

This morning, I had a voicemail from an attorney that represents this merchant company. He said there will be a summons of complaint delivered to my home later this week, and suggests that I don't ignore this matter any longer. He said I am responsible for the charges because I signed a personal guarantee when I began using this company for merchant services.

Am I truly liable for this fraud despite getting a verbal authorization for the charge?
 


JETX

Senior Member
"Am I truly liable for this fraud despite getting a verbal authorization for the charge?"
*** Yep. If you will read your merchant agreement, I am sure you will find the specific requirements that they have to get a charge validated. And presumably, that does NOT include a verbal approval for that amount from a non-domestic address.

If/When you get sued, take your documents (including merchant agreement) to a local attorney and let him/her review the facts and advise what action, if any, you can take.
 

theGWS

Junior Member
The merchant provider has a phone number to call that is for verbal authorizations only.

When a merchant calls this number, the merchant provider simply asks for the details they need (billing address, charge amount), then gives a verbal confirmation or denial.

Is there any negligence on their part for not verifying every detail before giving an authorization?
 

JETX

Senior Member
If/When you get sued, take your documents (including merchant agreement) to a local attorney and let him/her review the facts and advise what action, if any, you can take.
 

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