On November 7, the FTC and the State of Florida settled with a chargeback mitigation company and its owners for $150,000. The chargeback company was allegedly using deceptive practices, including referencing disclaimers that were not actually shown to the customers during the checkout process, to prevent consumers from disputing credit card charges through the chargeback process.
In addition to civil penalties, fees and other costs totaling $150,000, the agreed upon settlement will prohibit the chargeback company and its owners from working with certain high-risk clients and using deceptive tactics to stop consumers trying to dispute credit card charges through the chargeback process. The settlement, which was agreed to by the chargeback company, must be approved by a federal judge before it can go into effect.
Putting It Into Practice: This settlement sends a message that chargeback mitigation companies must not undermine consumers’ ability to exercise their rights. Any fraud on the part of consumers must be demonstrated by legitimate techniques before denying a chargebacks to avoid suppressing legitimate consumer disputes or circumvent credit card companies’ fraud monitoring systems.