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kmslaw, Solicitor
Category: Australia Law
Satisfied Customers: 210
Experience:  I have 15 years legal experience behind me and I graduated from the University of Sydney with First Class Honours in Arts/Law.
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I have an ecommerce I signed a contract with Eway to process

Customer Question

Hi, I have an ecommerce I signed a contract with Eway to process all the payments with credit cards, Eway works with Nab, they authorise the payment and transferred to my business account and charge a fee for this service.
A client place an order and the payment was accepted by Eway, this client sent us a message asking to help him and ship his order to Venezuela, we accepted. After that the same client place more orders accepted again by Eway.
We found this strange so we search for assistance from Eway and asked if the client was legit. Their answe was we are not sure, the. We said if you are not sure why are you accepting the payments, the client is asking when we will ship his products. They said we process the payments Nab is the one that authorises the payments. So if the autorise the payment and you receive the money on you account it is legit.
This client keep making more purchases saying that he is opening a business and he wants to sell in his country some of our products, we waited all the payments we proceessed and authorised by Eway and Nab. The charged their commission as per normal.
It took us more than a month to organised the orders, pack them, get the the documentation to export, etc. and started to ship the products the first week of Nobember.
This client placed orders from mid September to the beginning of November when he payed for the shipping cost.
The 23/11 I noticed charge backs in my business account, I called ANZ because I didn't know what it was and I though it was a mistake so I asked to investigate. The same day I received two letters from Nab, one charging the fees for the transactions and the other one saying the there is been a fraud and they will charge back one of the payments.
I spoke with someone from Nab bank and after 49minutes of talking she said she has registered on her computer that it was a fraud on the 28/10 were it took few days to send a letter communicating me. But I didn't received any communication or information regarding this issue, I did received adverting from Eway and nothing from Nab. They didn't even communicate each other as Eway accepted payments on the 5/11. Nab made the first charge back on the 5/11 so the already knew.
Since then I kept receiving letters for the 19 transactions that were accepted and authorised. The card was from Canada!
When I asked Eway it the transactions were legit, as this clients want me to ship to Venezuela, the shipping and billing address was Venezuela they have all the softwares and information to know if this was legit the same than Nab. Now the bank from the card owner is trying to recuperate the money and they are charging me back.
Is it legal what they are doing? Can they just take money out of your account without letting you know? If you are paying them a fee for the transaction and services isn't their direct fault what happened? Is there a case here? I have spoke with people to. nab they don't know what to say
Submitted: 1 year ago.
Category: Australia Law
Expert:  kmslaw replied 1 year ago.

Hello my name is***** am a solicitor in NSW who will help with your inquiry today. What you need is to attach for me the terms and conditions that apply to your account with Eway. Can you do that so that I can advise you?

Expert:  kmslaw replied 1 year ago.

By the way I might not be able to do this until 4.30pm Sydney time today if you get to my request before then.

Customer: replied 1 year ago.
Hi Kyle, thank you for our reply. Basically, this is the company that I signed with and these are the services that are included in their package.
I don't think there was any printed copy of the documents, it waist a form that you feel online. But I will definitely have a look.
But please check think I sent you were they clearly explain the feature of their service and. The systems they haven an againts fraud
Customer: replied 1 year ago.
Here is the quote that was approved
Expert:  kmslaw replied 1 year ago.

Hello. I apologise for the delay in responding to you, I wanted to re-read your initial text to see what exactly is happening before I read the terms and conditions to understand. I think the problem you have is with the terms and conditions at clause 17. You are indemnifying E-Way for any loss associated with supplying cardholder information. Do you take the cardholder information and put it into eway or does the cardholder do that? If you are supplying the cardholder's information to Eway, I suggest you put in place another step in your ordering process such that you ask for their passport to be scanned and certified by a public notary before you send the goods. That way, you are doing an extra cheque on the veracity of the cardholder's identity and when you have to indemnify Eway you should be indemnifying for less and less fraudulent transactions. Is it possible to do this? Otherwise, you need to negotiate the removal of clause 17 from the terms and conditions in your case.

Customer: replied 1 year ago.
Hi Kyle, thank you so much for your reply. But non of the information of the cardholder goes to me besides the name, and amount payed. All the other credit/debit card details information are received by Eway they are the ones that process the card and accept or decline the payment. I don't receive any information, once the client click to confirm his purchase it takes them to Eway website where they received and process the payments which are finally authorized by Nab.
This client that was a fraud was asked the products to be shipped the Venezuela, Eway knew that the card was edited in Canada they still processed the payments for 3 months several purchases. Nab authoruzed all of them and charges the transaction fees. At the beginning I found it strange and ask to Eway if this was legit before sending my products, the said if Nab authorizes the payment and credits you account as per normal it us legit.
Expert:  kmslaw replied 1 year ago.

Then it is not lawful for Eway to take your money, unless you have breached the agreement in some other way.

Customer: replied 1 year ago.
Thank you Kyle for your reply. The strange thing is that even though eway works with Nab. I had on the 6/11 a payment accepted by eway with the same stolen card and on the 5/11 a chargeback from a previous purchase of the same client made with the stolen card which means that Nab didn't communicate to eway about the fraud. I didn't received any nothification from Nab until the 24/11 where I saw the 5 chargebacks on my account on the 23/11 I completely missed the one on the 5/11 and I didn't received any nothification from the previous chargebacks made on the 5/11 and the 23/11. Is this legal? I check my account to transfer some money and I relaxed I had 4 chargeback of money on the 23/11 and the and day I receive a letter from Nab referring to a charge back that was going to happen the next day.
Customer: replied 1 year ago.
This is the letter I just received.
Hi MarielaRegarding the above vci disputes, please note the disputes are coming from an overseas bank that the true cardholder is dispute that their did not authorize these transaction.The transactions processed within a card not present environment carry a large amount of risk and the liability rests with the merchant. This is clearly documented within NAB merchant agreement. The authorisation obtained confirms that the card being used has an appropriate level of funds; it does not confirm who is conducting the transaction.We sent you debit letters a week before we debited you. This is the procedure for all disputes that come as fraud.You can also contact nab Resolve on 1800 152 015 if you wish to discuss further.Thanks and kind regardsJennifer Cardoza
Customer Service Officer - Merchant Chargebacks
Domestic Payments & Reconciliation, Customer Payments & Processing, EST
National Australia Bank
Customer: replied 1 year ago.
This is the email I replied.
Hi Jennifer,In regards ***** ***** dispute, I signed a contract with eway to make all the payments secure for my clients and myself.
Eway has all the technology and softwares to manage the information received and accept or declined a card not only based on the fact that the cards has founds or not.
The purchases made by this client where not one off thing they are several purchases made by the same client.
All the information about the card goes to eway and Nab bank for these reason Lovely Skin doesn't have at any time the details of the card reason for what it is impossible to know that the client is a fraud.
As advertised on Eway's website
My legal advisor has checked the terms and conditions of he agreement and there is not a clause that proves that Lovely Skin is responsible to be chargeback in case of this particular fraud. Since we don't receive or hold any information of the credit card and we don't process or authorise the payment we are not legally responsible for this particular fraud.
There have been also errors made by Nab during this process.
1. They knew about the fraud on the 28/10 and didn't communicate to eway or Lovely Skin
2. The keep charging the fees for the transaction confirming the acceptance of the payment.
3. The 5/11 was the first charge back made to Lovely Skin without previous communication, no letter was received, and we know for a fact that they didn't communicate about the fraud to eway. As eway keep accepting a payment the next day.
The person from Nab said you send the letter one week before to communicate the chargeback, we didn't received any letter, email or phone call and apparently eway didn't knew about it either.
4 The situation was handled from the beginning as a fraud but it was a dispute which follows completely different processes.
5 The dispute is from the Bank owner of the card and Nab who authorised all the payments. Not between Lovely Skin and the Bank owner of he card as we didn't had any information of the card.
6. We won't accept the chargebacks made to our business account because we signed a contract with eway to process all the payments and avoid fraud. We payed the fees and sent the products and the money was transferred into our accounts or 3 months as per normal. Nab didn't informed I meditate about the fraud.Yes, there is a lot of risk when it comes to ecommerce but that's why a signed a contract with eway and PayPal.Lovely Skin should not be the business that at the end of the day payees for other people mistakes , we asked if it was legit on the first transaction, eway said if Nab authorises the payment it is legit. Nab a big international bank is protected, receives and has access to all the information to know if a card had founds, if it is stolen, the billing address and all the details. The billing and shipping address that this client had was Venezuela. If the card was emited in Canada and with a different billing address the bank or eway should stop the first transaction,no ideation ask.Looking forward to hear solutions from you besides charging back Lovely Skin.Mariela Vera
Lovely Skin
Expert:  kmslaw replied 1 year ago.

Hello. I need the NAB merchant agreement to help you with this. Do you have it?

Expert:  kmslaw replied 1 year ago.

It's okay, I found the NAB merchant agreement, it is here. Under clause 4.4 of the agreement, on page 38, you will see that it's your responsibility to identify the card user and make sure that the card user is the owner of the card. So what you need to do is to establish that you have delegated this responsibility to E-way. However, under clause 2 of the Beagle Additional Terms and Conditions in the E-Way contract which we have attached above (under terms and conditions) you will see that E-Way have put the onus on you to establish that the cardholder has consented to the use of their details in order to use the E-Way gateway. So if you had a message at the E-Way gateway on your website (is that how it works) that says that the customer, by inserting their personal details and details of their card, must go through an additional process of identification before using the E-Way gateway then you can be satisfied that you are holding up your end of the bargain. However, if you don't do this, you are risking that your contract with E-Way and your contract with NAB, puts this onus on you to establish the identity of the person using the card. Does that make sense?

Expert:  kmslaw replied 1 year ago.

What I mean is, unless your website had an extra process of identification for customers using your site remotely, you aren't doing what the NAB and E-way contracts say you must do, so this triggers the right for them to charge back the payments following the lodgement of a customer's dispute.

Customer: replied 1 year ago.
Hi Kyle,
I really appreciate your quick reply and help.
By having extra process of the identification you mean
Customer: replied 1 year ago.
Customer: replied 1 year ago.
Do you refer to that type of extra information about the client?
Expert:  kmslaw replied 1 year ago.

Hi there. I am thinking that you need to take a further step to identify card holders, but I'm conscious of the fact that you are relying on E-Way to be a secure means of payment and that it would be arduous to have a process online that causes you to check passport data etc before you accept a payment via E-Way. So I'm wondering whether you have a cause of action against the person who actually owns the card used (allbeit that they exist overseas) as technically they should be preventing the data from their card from falling into the wrong hands. However, I feel as though I'm getting out of my depth in that regard, so I will opt out to allow another expert to advise you on this part. I'm sorry I can't help further.