LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

Telephone Order Fraud and Credit Card Chargebacks - What to Do?

Discussion in 'Commercial Law Forum' started by shane grigg, 13 July 2014.

  1. shane grigg

    shane grigg Member

    Joined:
    13 July 2014
    Messages:
    2
    Likes Received:
    0
    I own a shop and was contacted via email from a person who wanted to purchase a large amount of my stock. After emails back and forth with the prices, the discount I gave and the delivery instructions, he then called to make payment. He asked if it was ok to spread it over a few of his cards and because I have worked in retail before and others had done it I agreed.

    After he gave me his name, card details including the ex:date and code on the back I put it through without any trouble. He paid into my account the freight cost as well saying he had a company he wanted to use as the goods were going to the Philippines and he's used them before. The following day I checked to see if his payment had cleared in my account and it had, so I placed his order for the stock I was short on and paid the freight as directed.

    A few days later, he emailed me again asking for another order for the same amount and instructed me to do the same as before and let him know when It was ready for collection. A few more days passed and he again emailed and called deciding that because he was going to be getting a lot from me that he wanted a quote from the freight company for insurance for all the goods he was getting so I did what was asked. After I received the quote, I forwarded it to him and he picked what he wanted and paid me again over the phone so I could pay the company after it cleared, which I did. The total amount for all these transactions came to just under $36k.

    After all this was done I got an email from my eftpos company saying I was being back charged because the card owners did not do these transactions. I am in talks with the eftpos company and freight company about this matter, but I now believe the freight company is false and this is a credit card fraud as they keep saying they will refund me but keep making excuses why they can't deposit into my account. BUT, if I pay a $1230 fee they can do it with Western Union ( right ) I'm not that dumb.

    This is a quick run down on what has happened and all has been reported to the ACCC including all emails from all three parties but my question is this.

    After I purchased all the stock for the orders, paid out all the freight and insurance there's only about $4k left and the eftpos company is wanting me to repay all the funds. What can I do under contract law?
    I thought that after the money was cleared into my account that everything was good. Please help with any info.
     
  2. John R

    John R Well-Known Member

    Joined:
    14 April 2014
    Messages:
    637
    Likes Received:
    165
    Hi Shane,
    As a general rule, the clearance of funds in a "Card Not Present" (CNP) or "Mail Order Telephone Order" (MOTO) credit card transaction should be taken with a grain of salt unless you've taken steps to establish that the cardholder is the same person making the transaction (e.g. by requesting a photo of their driver licence and their credit card).

    This is because you, as the business owner, are generally responsible for any approved chargeback requests (plus any chargeback processing fees payable to your merchant account provider) if the transaction is unauthorised.
    1. Who is your EFTPOS/merchant bank account provider?
    2. In addition to the ACCC, have you reported the incident to your local police station (which would then generally be referred to the Fraud Squad)?
     
  3. shane grigg

    shane grigg Member

    Joined:
    13 July 2014
    Messages:
    2
    Likes Received:
    0
    Hi John
    Thanks for your input. My eftpos is through Tyro and I bank with Westpac. I reported it to the police at first but was told that there was not much they could do because no crime had been committed. I called the FEDS who said to go back to the police but make sure I go to the main branch. I did that and made my statement with all documents to the C.I.B. Again I was told there was not much they could do as this sort of thing happens all the time and he may not have even been in Australia at all. Frustrated at the fact I've worked hard all my life and put every cent into my shop and now stand to loose everything.
     
  4. John R

    John R Well-Known Member

    Joined:
    14 April 2014
    Messages:
    637
    Likes Received:
    165
    Hi @shane grigg
    If you've reported to the Police and assuming they are unable to assist, you may consider engaging a lawyer to review your agreements with Tyro and Westpac to understand if there's any opportunity for you to negotiate or dispute the repayment of the fraudulent funds. Otherwise, it's a very unfortunate and expensive business lesson on the importance of verifying identity in CNP/MOTO transactions.
     

Share This Page

Loading...