Originally Posted by NemesisEnforcer

To those that asked. My process is that when someone does a chargeback, I check the transaction for a valid AVS, CVV2 and the IP address for the ISP and location information. If everything is in order, I send a registered letter with return receipt to the customer explaining that I’m from the loss prevention department of company X and I’m following up on a potentially fraudulent chargeback. The letter explains the validity of the transaction as well as if the charge was made by a relative or friend that a crime may’ve been committed. In sum, the customer is encouraged to call my office to discuss this.

If the customer calls, I reinforce the message in the letter and let them know that all is forgotten if they send a check or money order to cover the transaction and chargeback fee. I had one lady tell me that her 15 year old son made the charge and I explained that criminal charges could be brought against him for stealing and using a credit card. She decided to pay but she wanted an invoice along with the user name and password.

If the customer does not respond within 10 to 30 days, usually 30 days, I submit their information to an online collection agency. The online collection agency will provide you with a copy of the customer’s credit report if you desire (you don’t need that), send collection letters to the customer as well as place the information on the customer’s credit report for all 3 credit bureaus. The fee for this is about $20.

Again, if the customer does not respond, it’s on their credit report and I’m done for now. In the future when they try to buy a car, house, refinance, get a job, etc. they will need to address this issue and you will be waiting. At that time I want the membership fee, chargeback fee plus the $600. If they pay that I will drop the interest charges per my TOS and provide them with a PFD letter.

As stated earlier, I add a $600.00 fee on top of all the transaction fees. I got that idea from an attorney who handles shoplifting cases for department stores. He explained that if a store decides to let you go after being arrested, they charge you something like a $300 fee on top of any damages. The fee is basically 1 hour of attorney time to handle administrative stuff. Using that as a guideline for reasonable fees, I came up with the additional $600 (1 hour of attorney time at $500/hour plus the $100 to cover phone calls, copying fees, etc.). I’m not using an attorney but that’s my penalty fee to the customer.

Exercise good judgment when the customer contacts you. Is their story believable?