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FTC bars Chargebacks911 from working with certain high-risk clients

FTC bars Chargebacks911 from working with certain high-risk clients

The Federal Trade Commission and the State of Florida have reached a settlement with Chargebacks911 that prohibits the “chargeback mitigation” firm from working with certain high-risk clients and using deceptive tactics to stop consumers trying to dispute charges.

In a complaint filed in federal court in April, the FTC and Florida said that the company and its owners, Gary Cardone and Monica Eaton Cardone, have used multiple "unfair techniques" to prevent people from successfully winning chargeback disputes.

Among the techniques used by Chargebacks911, says the complaint, was the regular sending of screenshots on behalf of their clients to credit card companies that supposedly show that consumers had agreed to the disputed charges — often recurring monthly subscription charges.

The complaint notes that, in many instances, these screenshots have not actually been from the website where consumers made the disputed purchases and that the company ignored clear warning signs the website screenshots were misleading.

The proposed court order, which has now been agreed to by the defendants but still must be approved by a federal judge before it can go into effect, would prohibit the firm from providing chargeback mitigation services to high-risk clients who use affiliate marketing and negative option plans to sell certain product types that are often fraudulently marketed.

The order would also prohibit it from knowingly using deceptive or misleading information on behalf of their clients and would prevent them from using techniques like their Value-Added Promotions service to help clients evade fraud-monitoring programmes.

The defendants also have to pay $100,000 in civil penalties and $50,000 in legal costs to the State of Florida.

“The settlement order will provide important protections for consumers who shop online,” says Samuel Levine, director, FTC Bureau of Consumer Protection. “It sends a clear message that chargeback mitigation companies must not undermine consumers’ ability to exercise their rights.”

In a statement, Chargebacks911, says: "We want to emphasize that this settlement is not an admission of wrongdoing but rather a resolution that reaffirms our dedication to serving as responsible participants in the industry. Our ongoing efforts aim to achieve the highest standards within chargeback and dispute management, and we will continue to support the ever-evolving wants and needs of stakeholders industrywide.”

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