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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 111679
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I have a fairly new (2years) wholesale business. I had a customer

Customer Question

I have a fairly new (2years) wholesale business. I had a customer who gave me his credit card # XXXXX email ( I told him not to but he did anyway!) I ran the #s along with the address and it was approved. Now I am told it was a fraud. The items were dropped shipped to the UK and of course I had to pay my distrubutor for them. Now my merchant processors is deducting it from my checking account without notice and it has put me in the hole. Shouldn't they be responsible?? They are the ones who approved the card!! This deal is really messing my small business up! I have spoken to my bank and they say dispute it through them. Who is really responsible me or the merchant processor?? Please advise because this could put me out of business!!
Submitted: 7 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 7 years ago.
Your dispute is through the merchant company since the transaction was not fraud and you would have to prove the transaction was authorized by your customer by providing them copies of the emails where they sent you the card number to process the sale. If you are not successful through the merchant processor, then you would have to sue the customer in the UK.

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Customer: replied 7 years ago.
It was fraud because the guy placed a second order and they caught that one. He had some sort of software to produce credit cards and scammed me. I have the address and name where it was shipped to but that poor fellow could have just ordered it from him or maybe it was a fake address??? I just don't know. I need to know what my rights are as a merchant. I know my dispute is with the processing company but is it my fault or theirs??
Expert:  Law Educator, Esq. replied 7 years ago.
If there was fraud in this manner then your recourse is against the party that stole the credit card, unless your merchant processor provided you with merchant fraud protection and for that you would need to read the merchant processor agreement. In this type of case, you will have to file against the party that actually used the fraudulent card.
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Customer: replied 7 years ago.
Thank you, XXXXX XXXXX have to read my agreement better. I think I am up the creek without a paddle because I am sure this guy doesn't really exist!!
Expert:  Law Educator, Esq. replied 7 years ago.
Thank you. If they are in the UK, you can contact Interpol's internet fraud unit as well.

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