Consumer Watch: Fooled by a forex scam? Get your own back
Fallen prey to a cryptocurrency scam and lost a sizeable sum of money?
Inadvertently “invested” your life savings in a scheme? Or lost out on that dream holiday, which the merchant is now refusing to refund, and your bank won’t approve a chargeback?
Now, you can get your own back, with a little help from professionals who work behind the scenes to recoup your money.
MyChargeBack, a leader in resolving authorised complex card-not-present transaction disputes, has announced it is opening an office in South Africa. It’s on a mission to help consumers recover their money after being scammed, deceived, or had their information compromised.
The Delaware-based company has recouped millions of dollars’ worth of funds for clients in more than 150 countries. It’s now appointed Dawn Minnaar, a veteran in credit card dispute resolution, as country manager. Minnaar previously worked for Absa in senior chargeback-related positions.
Michael Cohen, MyChargeBack’s vice-president of operations, says they opened an office in South Africa due to a “steady rise” in the number of enquiries from consumers, frustrated by their inability to obtain refunds for goods and services not rendered.
“Banks can be hesitant, if not unreceptive, to cardholder requests to raise these types of disputes, making chargebacks difficult to obtain,” he says.
MyChargeBack has worked with South African customers, in the background, from the start, but this is the first time they have opened an office in the country.
Chargebacks are the forced reversal of credit card payments that are initiated by the cardholder’s bank. Similar to a refund, chargebacks were designed as a form of consumer protection. Visa and Mastercard guarantee that cardholders can apply for a chargeback at any time within 120 days from the transaction date. Under certain conditions and in some jurisdictions, that period can be extended. American Express does not impose any time limit on its cardholders.
The chargeback facility allows customers to bypass a merchant (or fraudster) by asking that their bank recoup their funds. An investigation follows, and if the bank agrees the cardholder’s request is valid, the funds are taken from the merchant’s account and returned to the consumer.
It’s not a swift process - nor is it immune to abuse, which has earned it the moniker, “friendly fraud”. Cardholders are known to abuse the process by filing false chargebacks against merchants and retaining the goods, while the merchants not only loses out on the product, but is also hit with a penalty. If enough chargebacks are made against a merchant, they can be exited from the payment system.
Elli Waldman, the company’s director of recovery services, says they encourage customers to first try to resolve their matters with merchants, before approaching them. If the merchant is not prepared to refund, MyChargeBack may be able to assist by preparing the application.
If you’re disputing amounts less than $5 000 (R84 310), MyChargeBack is not for you, he stresses.
“Complex chargebacks require ‘deep dive’ investigations. We look at their terms and conditions, what they are advertising, what the cardholder was expecting, we gather documents. If you come to us with a claim for example, R500, we can’t help because it won’t be worth our while. These investigations take a lot of work, hence the $5 000 threshold.”
MyChargeBack charges a 20% fee upfront, non-refundable. But they only take on cases where they are confident about chargeback rights, he says.
Launched in May 2016, MyChargeBack was born in response to demand for a customer-centric service. With many companies helping merchants fight chargebacks, it was time to help customers navigate a world of vague terms and conditions.
They view themselves as consumer advocates, working with the banks to help cardholders. New customers approach them through their website’s chatbot, which helps filter out strong cases, and they don’t take upfront fees unless they are confident that the cardholder has a strong case.
MyChargeback’s success rate though, varies from country to country and bank to bank. But, Waldman says they have helped recoup tens of millions of dollars for clients.
“Our goal is to continuously work in co-operation with the banks. Our consultants know the intricacies of chargebacks so everybody can get their money back.”
Types of cases
Typically, MyChargeBack does not take simple fraud cases: most of their work is in the card not present environment, contracts for difference (CFD), forex and binary scams, and those taken advantage of by unscrupulous merchants.
They help provide compelling evidence to the bank, with the correct codes, to show that what might appear on paper as an “investment”, which was coded seemingly legitimately, was in fact a scam.
Sometimes, though, it comes down to simple service rows: in one case, parents wanted to recoup money from a caterer who failed to provide shrimp cocktails as per the purchase order, and the company was able to launch a chargeback against that menu item.
For electronic funds transfers, you might be out of luck, Waldman says.
“This becomes more of a legal matter. We have a division that looks at EFTs, but their work is much more complicated.”
* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected], tweet her @georginacrouth and follow her on Facebook.
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