The ability to chargeback a transaction was originally set up to provide an avenue for consumers to appeal unwanted charges they could not otherwise resolve directly with a business.  Most consumers believe there isn’t a difference between contacting their bank for a refund and contacting the business directly.  Banks are supposed to check and see if their customer has tried to resolve the matter with the business before processing the chargeback.  Unfortunately, many banks are understaffed, overworked and rarely have a dedicated person to following up on disputes to determine if they are legitimate. 

In most cases, businesses would gladly resolve consumer dissatisfaction or misunderstanding if only given the opportunity.  Unfortunately, the resolution of purchase disputes with a bank is seen by the public as a convenient alternative to direct reconciliation with a business.

Intentional fraud is widely viewed as being more dangerous to business than friendly-fraud.  While the damaging effects of malicious fraud endanger businesses and consumers alike, friendly-fraud also contributes significantly to the chargeback crisis.  Friendly-fraud is the fastest growing source of chargebacks today and accounts for more than all other chargebacks combined.

Banks and consumers are actively engaged in protecting themselves from fraud, lost business, and lost revenue.  Since no one in this commercial hierarchy will stand up for the rights of individual merchants, it is time they take action to protect themselves.   Businesses must adopt deliberate and proactive measures to combat chargebacks.   Chargeback Guardian is the merchant’s most powerful ally in this effort. 

Unfortunately, many times you can’t tell. There are two major reasons why merchants should clarify the information they receive from an agent or ISO. 

• Complicated and changing processing regulations make it difficult for agents to provide merchants with accurate information.  Information can be made instantly obsolete as a result of changing guidelines.  What may be true one day, may not be true another day.  And what may be true for one processor may not be true for another processor. 

• Sometimes misinformation is forwarded as result of the agent trying to board an account within their processor’s guidelines.  ISOs and associated agents receive commissions through the boarding of new processing accounts and many have no real accountability to processing merchants.  When considering this fundamental relationship, it is easy to see how an agent’s motivation to make a sale may compromise their ability to ensure the account being setup properly.  Agents are notoriously ambitious in their commitment to guarantee businesses a processing account.  Unfortunately, this enthusiasm does not always work in favor of the merchant.  Some agents may embellish merchant products, modify anticipated processing volumes, skew industry categorizations, etc.  These small adaptations may secure initial processing capabilities; however, the setup of a merchant account under false premises set unrealistic expectations for the bank and rarely end well for the business.  Sometimes these inconsistencies can even justify a bank in placing a business on the Terminated Merchant File or Match file. 

It is crucial for merchants to assume a proactive role in protecting their processing accounts.  We can help.  Chargeback Guardian works with respected and reputable processors and banks who have proven their integrity and competency in navigating complicated regulations for both domestic and international processing accounts.

The immediate suspension of processing capabilities is the first and most obvious consequence of TMF status.  While this is a serious circumstance to face on its own, many merchants are unaware of the additional long-term stigmas associated with the TMF label.  The first difficulty TMF merchants face is the restoration of processing privileges.  Banks and processors refuse to assume the risk of previously matched businesses or business owners.  For this reason, it can be nearly impossible for merchants to regain processing privileges with alternative financial institutions.  In addition, the TMF includes permanent databases of business names, owner names, social security numbers, addresses, phone numbers and product names.  These histories can permanently plague business owners and compromise the financial security of future business ventures.