It turned out very profitable for the company though. Stonewalling customers and refusing charge backs is too easy. Not picking up the phone is a good business strategy.
That doesn't sound right...? Credit/debit card chargebacks are handled by the bank. If the merchant doesn't pick up the phone, the bank will take the money from the merchant and return it to the customer.
https://www.usatoday.com/money/blueprint/credit-cards/credit...
Were you using a different payment system with fewer consumer protections than credit/debit cards?
However, merchants do have an opportunity to respond to a chargeback request. Providing plausible evidence that the request is in bad faith will often result in the bank not performing an actual chargeback.
Refusing chargebacks and not issuing refunds are two very different things with distinct language. And if you don't issue refunds for a case like the GP described, where thousands of customers were incorrectly billed, you certainly would be flooded with chargebacks and likely put your merchant account in jeopardy. (Most of the big processors would close your account if they get evidence you are fraudulently billing customers and actively resisting making it right.)
It's clearly a made up story by someone with no experience actually managing credit card payments for a real business.