Hacker News Reader

Comment by gruez | Hacker News Reader

Many commenters in this thread seem to be against this change, but looking at the article they seem... pretty reasonable?

>With this change, if merchants can provide additional data or evidence to show that the disputed charge is valid, then the dispute will be invalid.

>This change will empower merchants to protect themselves against first party misuse by enabling them to submit additional evidence that a purchase was indeed legitimate and authorized by the cardholder in order to stop the dispute claim. Additional examples that can help identify that a purchase is legitimate include a customer using the same payment credential previously at the merchant, login credentials, proof of use of a product and more.

View on HN

The biggest issue here is that the "proof" allowed essentially means recurring billing scams can run rampant without any recourse. Unfortunately a significant amount of "businesses" online and offline are forms of recurrent billing scams. Chargebacks are the /only/ protection consumers have against this form of scam, other than going to court at their own expense.

This GREATLY weakens consumer protections for basically no upside by enabling bad actor merchants. End of story.

> bad actor merchants

It's even worse than this——"reputable" merchants will start acting even worse.

Here's an experiment you can do right now: go to WSJ.com and buy a subscription (instant). Now try to cancel. No button to do so. So start a Support Chat. Clearly type that you want to cancel. You are directed to call a phone number. So now you have to spend anywhere from 5 - 60 minutes on the phone. I tried to do a charge back on my Amex after I experienced this, and was denied.

This is the Wall Street Journal doing dark patterns and getting away with it. Imagine what will happen if credit card companies make it easier for merchants to do stuff like this.

It’s not setup nicely but that is not what a chargeback is for. You ordered a service and got it, you do have to pay for it.

Yup, someone just posted about TeamViewer's version of this scam a few hours ago:

"30 days before your subscription expires, teamviewer send you a friendly email to remind you to that your subscription expires in 30 days and to be sure to renew before then in order to not lose service. What that email does not tell you is that unless you cancel your subscription at least 30 days (ie on that very day) before your sub expires they will renew you automatically and demand a full year's subscription under threat of legal proceedings..." - https://news.ycombinator.com/item?id=32164897

All -- it’s a good idea for your card(s) to be “stolen”, maybe once every year or two. And yes, it is definitely “stolen”, and not lost. Reps will definitely ask this. If it is lost (which it isn’t), the “thieves” may be able to continue to charge your card number.

This is a cleansing process.

Sometimes card issuers will 'helpfully' send the updated card details to the recurring charge merchant.

The pretext for this change by Visa is that some cardholders are making false claims to the card company.

This "stolen" sounds like it might be a different kind of false claim.

Can consumers operate while maintaining impeccable high ground?

As long as merchants use dark ui patterns, a misleading or anti-merchant response from consumers is justified.

I for one am appalled that visa is making merchant fraud easier, making payments less controlled by cardholders.

That's like, to me, why can't my bank/credit card block charges from a merchant? (Or make you jump through repeated hoops to do so).

I've heard banks tell me "well, you signed a contract with them, so we need to let the charges go through", or the "for your convenience"...

No, my bank has a fiduciary duty to me. If blocking a charge causes me to get into conflict with the merchant, that's between the merchant and I - my bank shouldn't be taking any "side" (and if they do, it should be mine).

> The biggest issue here is that the "proof" allowed essentially means recurring billing scams can run rampant without any recourse.

Yup, every gym and pest control company just got aroused thinking about all the recurring charges they could now slip in.

You are giving the businesses and other big actors way too much a benefit of the doubt. These large organizations will outright lie to win disputes.

For example, I am an attorney who practices in the space, and I recently filed a dispute with my credit card. In response to my dispute, which I supported with a sworn affidavit, the retailer responded with a blatant, demonstrable lie. They said I never contacted them. Of course, they messed with the wrong person, and I responded with additional evidence and substantiation. I am confident I will win. But most consumers are not going to be able to execute on a dispute the same way that I did. Most consumers just get screwed by the lie. And that’s under the CURRENT system. So now we’re making it even easier for them to lie and screw over customers. Great

As a merchant I can also say the opposite is true. Just as there are dishonest businesses there are dishonest customers. However I think it is at least harder for a business to maintain dishonesty because 1) chargebacks are easy to do under the current system and 2) something like > 1% chargebacks get you suspended (regardless of legitimacy of chargeback).

I think the system could benefit from tightening and more fair procedures. Simply having a more consumer-oriented system doesn’t solve the problem, and leads to overall higher prices that get built into products.

Buyer biased dispute resolution is a ultimately a good thing for merchants. Without it scummy merchants will gain an advantage, the average trust of the whole industry declines, and customers pull back their spending. Soon bad merchants are the majority. Seller biased dispute resolution would allow the classic scam of taking payment but delaying shipment for weeks to re-emerge.

Not really. Buyer biased dispute resolution simply shift the costs of fraud to the merchant, which then build it into the product costs. The only real winner is the middlemen (credit cards) that make money on increased transaction volumes.

Agree 100%.

Chargebacks are a nightmare for small businesses. We never win, even when we should. Customers keep the items they ordered, and get their money back. How is this okay?

Visa worded this announcement very carefully to give you the impression it's a reasonable change. It's only reasonable for the predatory merchant operators.

Consider the phrasing "first party" instead of "cardholder", to make it less obvious who they're referring to.

The more euphemisms and acronyms used, the worst it probably actually is for you.

Whether or not you think the change is reasonable, something that Visa and other CC processors need to allow is for a consumer to say "I do not want to allow future charges from this merchant", and then to notify the merchant that they will no longer be able to charge that card. This would at least protect against predatory recurring charges.

Virtual credit cards work great for this purpose. Unfortunately, they are cumbersome, and very few financial institution support them these days.

The merchant can outright lie. I returned a $2k item to Amazon once. Amazon failed to refund, so I filed a dispute. Amazon replied with a 50-page PDF that at the end claimed they didn’t get the item. I then pointed out that not only did UPS deliver it to them in Nevada, but it was Amazon customer support that gave me the tracking number.

This change by Visa is going to be abused by big merchants who have legal teams draft up bullshit blanket responses to scare consumers and then exit pre-arbitration. Since the cost to arbitrate is $400 minimum, it’s difficult for consumers to go through with it.

Note that Visa is citing a report by Sift, who is a YC company that is one of the worst data brokers out there. They were extremely non-CCPA-compliant as Jason Tan found out the hard way: https://www.nytimes.com/2020/01/15/technology/data-privacy-l...

It sounds like a great way to create a system that concentrates and abuses power, not unlike a "secret court". If the company claims something like "it's covered in the ToS/EULA" what recourse do consumers have if that statement is not exactly true? If Visa agrees with Walmart about some nebulous wording in legalese, where a judge would read it differently, how can consumers advocate for themselves? Lawsuits are an option only for those with the time and access to pursue remuneration through the legal system so that is not a serious option here.

There’s an ocean between fraudulent chargebacks eg canceling or refunding your delivery food after it was delivered and purchases in predatory mobile games that were made without an adult in the loop.

I bought a ticket for an event in January 2020 for April 2020...as you can guess, the event was delayed. It ended up being delayed for over two years. The merchant refused to refund the charge, and a chargeback was my only recourse. Was that first party fraud? I really don't think so, I bought something that wasn't delivered, seems pretty simple to me.

This likely depends heavily on the terms & conditions of the ticket issuer at the time of purchase.

It's not obvious to me that your credit card processor should be forced into dispute resolution in lieu of small claims courts... but if they are being asked to serve that function, then it's reasonable to request evidence from the merchant before rendering a decision based on your accusation.

No.

The goods were not delivered and the vendor kept their money anyway. How is this okay?

Ticket vendors usually have crappy terms of service. Why did you agree to it?

As the previous comment said, this belongs in small claims court, not chargebacks.

Because it's either that or never get to see cool things? This doesn't justify ripping off individuals who made the purchase in good faith.

You may very well be right: maybe they're ripping you off and maybe the ToS are unenforceable.

What I'm saying: adjucating these situations is the purview of a justice system (ie courts). If you were ripped off, you can always go after the party that caused damages (ticket issuer). If you want a "short cut" to "justice" provided by a credit card processor, well then they get to decide when & how -- and I don't think it's unreasonable for them to collect "evidence" from both parties to make more-informed decisions. And again, if you dislike their rulings you always have small claims court at your disposal.

It's not justified. But every time we click past terms of service, we know we're agreeing to a small chance of getting screwed.

Your comment is radically naive. You can't literally believe what a business writes in its PR spin. The only thing you can take away from this is that Visa intends to tip the balance towards merchants and away from consumers when it comes to chargebacks. The problem with this is chargebacks just barely work as is.

Punishing honest consumers is not the right way to go about this.

If I understand this correctly it is essentially doing second presentment preemptively. ("Hey, Visa, just in case the client questions authorisation, here you have some additional data to shoot those down immediately without you having to contact me for those details")

Most of these pieces of evidence seem worrisome. If I transact with a vendor and they screw me on the second transaction, why should my using the same payment method count against my chargeback?

“Login credentials” and “proof of use” are obviously vague statements, but hopefully require something very specific. If someone acquires my credit card, sets up an account on a service, and uses that service, it doesn’t make it any less fraudulent.

Reply on news.ycombinator.com