Can merchant charge the credit card "chargeback fee" back to a consumer?

[sfraiders]

What is the name of your state (only U.S. law)? CA

I called my credit card company to dispute a service renewal charge for a merchant. The credit card company returns the money back to me. However, after a couple month, I received a letter from a collection agent with the orignal charge + "chargeback fee" + "collection fee". I am very surprise because the merchant send the dispute to the collection agent without resolving the issue with me first. I don't even know that they are going to charge those extra fee to me. Even worst, the chargeback is supposed to protect the consumer. How can a merchant charges those fee back to a consumer? I complained that to BBB, however, the merchant claims that it is already send to a collection agent and therefore BBB should not be involved. (Unfortunately the BBB's staff handle the case seems to agree that without looking at the real issue and their business practices.) The merchant's BBB rating is not good and seems they are extremely experience in playing with the system. I want advise on how I should proceed. I do not feel the merchant have any intentions in acting with good faith. I feel all these bully practices with the intention of squeezing any penny from a customer decided to cancel their service.

BTW, when I dispute the "chargeback fee" with the merchant, they said it is cover in their term of services for "illegal transaction". I feel they are inventing terms so they can charge the consumer? How should I dispute this fee?

 

[TheGeekess]

What is the name of your state (only U.S. law)? CA

I called my credit card company to dispute a service renewal charge for a merchant. The credit card company returns the money back to me. However, after a couple month, I received a letter from a collection agent with the orignal charge + "chargeback fee" + "collection fee". I am very surprise because the merchant send the dispute to the collection agent without resolving the issue with me first. I don't even know that they are going to charge those extra fee to me. Even worst, the chargeback is supposed to protect the consumer. How can a merchant charges those fee back to a consumer? I complained that to BBB, however, the merchant claims that it is already send to a collection agent and therefore BBB should not be involved. (Unfortunately the BBB's staff handle the case seems to agree that without looking at the real issue and their business practices.) The merchant's BBB rating is not good and seems they are extremely experience in playing with the system. I want advise on how I should proceed. I do not feel the merchant have any intentions in acting with good faith. I feel all these bully practices with the intention of squeezing any penny from a customer decided to cancel their service.

BTW, when I dispute the "chargeback fee" with the merchant, they said it is cover in their term of services for "illegal transaction". I feel they are inventing terms so they can charge the consumer? How should I dispute this fee?

Alrighty then.

 

[justalayman]

contact the card issuer (not the bank but Visa, Amex, MasterCard, or whomever it is) and ask them. More than likely the merchant agreement does not allow that fee to be collected from the customer per that contract.

 

[RedemptionMan]

What is the name of your state (only U.S. law)? CA

I called my credit card company to dispute a service renewal charge for a merchant. The credit card company returns the money back to me. However, after a couple month, I received a letter from a collection agent with the orignal charge + "chargeback fee" + "collection fee". I am very surprise because the merchant send the dispute to the collection agent without resolving the issue with me first. I don't even know that they are going to charge those extra fee to me. Even worst, the chargeback is supposed to protect the consumer. How can a merchant charges those fee back to a consumer? I complained that to BBB, however, the merchant claims that it is already send to a collection agent and therefore BBB should not be involved. (Unfortunately the BBB's staff handle the case seems to agree that without looking at the real issue and their business practices.) The merchant's BBB rating is not good and seems they are extremely experience in playing with the system. I want advise on how I should proceed. I do not feel the merchant have any intentions in acting with good faith. I feel all these bully practices with the intention of squeezing any penny from a customer decided to cancel their service.

BTW, when I dispute the "chargeback fee" with the merchant, they said it is cover in their term of services for "illegal transaction". I feel they are inventing terms so they can charge the consumer? How should I dispute this fee?

ok so the cc gave your money back to you on the charge but the merchant turned it over to a collection agency? If that is what you are saying then they really can not make a valid collection on those funds that would affect your credit rating. Do you have a copy of the merchants terms and conditions? Basically, there is nothing they can do against you and who knows if the collection agency they actually are using is legit. If they wrote it off to a collection agency then I would just tell the collection agency that the charge is not valid and if you have a letter or a notice of cancellation that you gave the merchant then forward that on to the collection agency.

 

[justalayman]

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If that is what you are saying then they really can not make a valid collection on those funds that would affect your credit rating.

say what?


while they may be contractually obligated to some action or not, that does not prevent them from ignoring such a rule and seeking payment through the courts. Even with the charge back fee, if the merchant can prove the charge back claim was based on fraud, the merchant will likely be able to recoup even that fee. It is up to the card provider to deal with the merchant if they breach the contract with them.

If they wrote it off to a collection agency then I would just tell the collection agency that the charge is not valid and if you have a letter or a notice of cancellation that you gave the merchant then forward that on to the collection agency

who said the claim is not valid. The rules that apply to the merchant per the merchant agreement may allow a chargeback, even if it would not otherwise be supported by law. That is all based in contract. If the merchant believes they have a valid claim to the money, they can sue the customer for it. You have to understand; nobody cancelled anything. The credit card company merely said the merchant would not be receiving payment through the credit card system.

 

[swalsh411]

My advice would be to send the creditor a letter saying:

1. The charge is not valid. (include whatever documentation you have).
2. You will not pay
3. Stop contacting you

Their only recourse would be to sue you, which I doubt they will since they don't appear to have a case.

You also should be monitoring your credit reports and if this shows up then follow the procedure to dispute it. (You should be monitoring your credit report at least annually if not twice a year anyway. Just something you have to do these days).

 

[TheGeekess]

OP has not said if he contacted said merchant to cancel the services before calling the credit card company/bank for a chargeback. I have a feeling that's where the problem with the merchant lies. I've seen folks that wouldn't call the vendor to cancel services but would call their credit card company instead (as if the credit card company were the vendor!).

 

[RedemptionMan]

\
while they may be contractually obligated to some action or not, that does not prevent them from ignoring such a rule and seeking payment through the courts. Even with the charge back fee, if the merchant can prove the charge back claim was based on fraud, the merchant will likely be able to recoup even that fee. It is up to the card provider to deal with the merchant if they breach the contract with them.

They are not seeking payments from the courts, they are seeking them from a collection agency the court system will not be involved. A collection agency buys bad debt for a penny on the dollar. Anything they collect is gravy.

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who said the claim is not valid. The rules that apply to the merchant per the merchant agreement may allow a chargeback, even if it would not otherwise be supported by law. That is all based in contract. If the merchant believes they have a valid claim to the money, they can sue the customer for it. You have to understand; nobody cancelled anything. The credit card company merely said the merchant would not be receiving payment through the credit card system.

OP stated in his original statement that he cancelled the service and that the cc gave him his money back. If it is a subscription service then he has rights to cancellation under whatever agreement he signed. Depending on the merchant and its business practices in deciding whether or not the party gets the money back. By them turning it over to collection agency so quickly indicates to me, although we do not know the amount of money involved, that the company is just trying to get something and not bother with the courts.

 

[Antigone*]

Apparently Visa, MC, whoever has declined the chargeback and it is now the responsiblity of the customer. If they OP feels strongly that he does not owe the charge his recourse now is to pay it and then sue the merchange.

 

[Zigner]

They are not seeking payments from the courts, they are seeking them from a collection agency the court system will not be involved. A collection agency buys bad debt for a penny on the dollar. Anything they collect is gravy.

Such a broad brush.

Our small-business will sometimes use the services of a collection agency. They don't "buy" the debt from us. They simply receive a percentage of whatever amount they collect.

 

[justalayman]

RedemptionMan;3181556]They are not seeking payments from the courts, they are seeking them from a collection agency the court system will not be involved. A collection agency buys bad debt for a penny on the dollar. Anything they collect is gravy.

but they can involve the courts. Regardless, it can be reported to the CRA's as a delinquent debt.

On top of that, how do you know the debt was sold and is not simply being collected by an agent of the original creditor?

OP stated in his original statement that he cancelled the service and that the cc gave him his money back.

and that is based on a contractual justification. Not necessarily sustainable in court.

If it is a subscription service then he has rights to cancellation under whatever agreement he signed.

and of course you know the rules of that agreement, right?

By them turning it over to collection agency so quickly indicates to me, although we do not know the amount of money involved, that the company is just trying to get something and not bother with the courts.

many companies utilize a collection service. Why is that a problem in your mind?

 

[RedemptionMan]

but they can involve the courts. Regardless, it can be reported to the CRA's as a delinquent debt.
and of course you know the rules of that agreement, right?

many companies utilize a collection service. Why is that a problem in your mind?

I do not have to know the terms of the agreement, the customer called and cancelled that is in his right to do so. This incidence reminds me of a time when I was going to buy a car and put down a deposit of 500 dollars on a AMEX card. The car was not as described and was not in good shape. I offered the dude to split the deposit with him and I just wanted 250 bucks back. He told me to blow off and I told him that either he could give me 250 back or AMEX buyer protection would give me the whole 500 back. He decided to be a punk about it and want it all, so I told him what would happen. I opened a dispute with AMEX and they took over crediting the full amount back to me and then asking him to refund the money. He never did so AMEX proceeded to file a $500.00 civil claim on that money for me. This person ended up calling me after it was go to court or pay the 500 bucks back whining and wanting the money. I laughed in his face and told him that I offered to let 250 go back towards you and you would have made some money but you did not take it so now I have the full amount back. I told the small business owner what was going to happen, if your agenda is small business rights then it is showing but I could care less if you turn over whatever amount of money to claim in your business dealings. Some people try to get things over on you in business dealings; however, I feel this person is not.


The option of paying and then filing a small claim on the money to make sure it does not affect your credit rating is sound. If they want to be mean about it they could still report it to your credit bureau must most of the time they will not.

Good Luck.

 

[Antigone*]

I do not have to know the terms of the agreement, the customer called and cancelled that is in his right to do so. This incidence reminds me of a time when I was going to buy a car and put down a deposit of 500 dollars on a AMEX card. The car was not as described and was not in good shape. I offered the dude to split the deposit with him and I just wanted 250 bucks back. He told me to blow off and I told him that either he could give me 250 back or AMEX buyer protection would give me the whole 500 back. He decided to be a punk about it and want it all, so I told him what would happen. I opened a dispute with AMEX and they took over crediting the full amount back to me and then asking him to refund the money. He never did so AMEX proceeded to file a $500.00 civil claim on that money for me. This person ended up calling me after it was go to court or pay the 500 bucks back whining and wanting the money. I laughed in his face and told him that I offered to let 250 go back towards you and you would have made some money but you did not take it so now I have the full amount back. I told the small business owner what was going to happen, if your agenda is small business rights then it is showing but I could care less if you turn over whatever amount of money to claim in your business dealings. Some people try to get things over on you in business dealings; however, I feel this person is not.


The option of paying and then filing a small claim on the money to make sure it does not affect your credit rating is sound. If they want to be mean about it they could still report it to your credit bureau must most of the time they will not.

Good Luck.

Chargeback are not always resolved in the consumer's favor.