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How to deal with fraudulent charge-backs (this is not a question) - Page 2
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How to deal with fraudulent charge-backs (this is not a question)

2

Comments

  • randvegetarandvegeta Member, Host Rep

    @zevus said:

    @randvegeta said:
    If you get a payment dispute, challenge it! Unless the payment was actually made fraudulently, there is no justification to charge back. This is true for Paypal and Credit Cards! The most common dispute we see is an 'item not as described' dispute via Paypal.

    If you ignore the dispute, Paypal will always side with the buyer. If you challenge the dispute, there is a very good chance Paypal will side with the provider so long as you show that the dispute is bogus (which they always are!).

    I order "Dual E5-2620 Xeon", "... dedicated server ... form of a virtual machine" (maybe someone can identify based on this, laugh). It is provisioned with one core.

    I write ticket to support, support tells me specs it's supposed to be. I write back to support and say support didn't address the fact that I've been provisioned with one core. Support forwards it to 'higher tech' (forgot the term used).

    Another 24 hrs passes, and my server now shows as having 6 threads. I write back to support. No answer for about 48 hours. I create a new ticket & say I want a refund. No response for 24 hr. I write back and say I'm going to have to do a charge back on Paypal, and that I'll wait another day. Another day passes, so I initiate the chargeback. Provider never responds.

    I've done less than a handful of chargebacks on Paypal since I started my acct in 1999.

    The last one I tried, it didn't qualify for buyer's protection, but Paypal just offered me the money as 'goodwill gesture' anyway. They are able to do so up to $10,00 or so,

    Sounds like the provider was defrauding you. That's obviously justified for chargeback.

  • @randvegeta said:
    Sounds like the provider was defrauding you. That's obviously justified for chargeback.

    No offence, but unless the provider explicitely offered support or an SLA there was nothing wrong with it and the chargeback itself was sort of fraudulent .... :)

    I hope it is now more obvious was I meant earlier.

  • randvegetarandvegeta Member, Host Rep

    @bitswitch said:

    @randvegeta said:
    Sounds like the provider was defrauding you. That's obviously justified for chargeback.

    No offence, but unless the provider explicitely offered support or an SLA there was nothing wrong with it and the chargeback itself was sort of fraudulent .... :)

    I hope it is now more obvious was I meant earlier.

    I don't think so. If a host doesn't even have the intention of providing the service they are advertising, then that's fraud. Not having an SLA simply obsolves the host from liability in the event there are some issues.

  • 'so I should point out that on our LOW END services, we have a policy of No Refunds, No SLA and No Support.'

    So are you saying that if a server is offline for 99% of the contract time that a refund/support isn't justified at all because you wrote a sentence before ordering? I disagree, policies like this just make more problems for yourself and you may be better off charging a little bit more so you aren't getting 3 year old brats buying your stuff and you can offer support and an SLA on uptime.

  • @randvegeta said:
    I don't think so. If a host doesn't even have the intention of providing the service they are advertising, then that's fraud. Not having an SLA simply obsolves the host from liability in the event there are some issues.

    A provider will rarely admit intent. Where do you draw the line? The price is a very poor argument to basically provide no service. Thats why all these no SLA and no support offers are somewhat dubious.

  • @6ixth said:
    'so I should point out that on our LOW END services, we have a policy of No Refunds, No SLA and No Support.'

    So are you saying that if a server is offline for 99% of the contract time that a refund/support isn't justified at all because you wrote a sentence before ordering? I disagree, policies like this just make more problems for yourself and you may be better off charging a little bit more so you aren't getting 3 year old brats buying your stuff and you can offer support and an SLA on uptime.

    Earlier he mentioned that below 90% would be intolerable. But maybe at that point I think having a written SLA of 90% uptime would probably be better.

    What do you think @randvegeta ?

  • @MagicalTrain said:
    Earlier he mentioned that below 90% would be intolerable. But maybe at that point I think having a written SLA of 90% uptime would probably be better.

    IMHO 90% is intolerable, thats 72 hours of downtime in a month. If that is a regular thing it would be better not to provide a service at all, regardless of how "cheap" it might be.

  • I would like to see providers implementing Coinpayments more often. Now that BTC is out of the picture I feel that'll become a future requirement of mine. Big up to BuyVM for implementing that and opening my eyes to how wonderful it is.

  • MikePTMikePT Moderator, Patron Provider, Veteran

    Just a note. I have seen many ridiculous ToS. Just because you write whatever you want there, laws still apply and are valid above any ToS. Even forcing the client to agree with it before signing up doesnt mean the ToS can state everything the providers want.

    Thanked by 1fat27
  • KermEdKermEd Member
    edited December 2017

    You also have to take into account legitimate issues. For example, with the Alpharacks outage - I paid little bit for a year's worth of service. A month in, their server goes down - I lose service for 3 weeks, and and all the data is lost. Because I'm now outside their refund period, they refuse. After a dozen exchanges, they finally offer a 3 week credit and an empty VM.

    Risky as a low end host is, is a client really expected to continue on a service at that point? Sellers do have to be accountable - a service was still traded for cash, and placed like where I am have protections as a consumer, pushing blame on the seller for underpricing. No support, no SLA, no refunds doesn't equal no service :) my bank would honour a refund on a 5 second outage if no SLA is agreed to.

    Keep in mind too, people are usually vengeful. If I have a particularly difficult experience where the service I paid for isn't provided - I'll make sure I cost them far more in support effort and lost clients (very rare but happens). Flexible hosts I'm in good standing with, I will make full price purchases from... Sometimes the long cost of refunding is more than just the few dollars being exchanged.

    Note: Of the 18 or so hosts I'm using, I only have had 2 fail (in my opinion) to meet a commitment. So if you are seeing a lot of charge backs from difficult clients like me, maybe you should focus on what is wrong with the service you are providing...

    Thanked by 1fat27
  • randvegetarandvegeta Member, Host Rep

    @MagicalTrain said:

    @6ixth said:
    'so I should point out that on our LOW END services, we have a policy of No Refunds, No SLA and No Support.'

    So are you saying that if a server is offline for 99% of the contract time that a refund/support isn't justified at all because you wrote a sentence before ordering? I disagree, policies like this just make more problems for yourself and you may be better off charging a little bit more so you aren't getting 3 year old brats buying your stuff and you can offer support and an SLA on uptime.

    Earlier he mentioned that below 90% would be intolerable. But maybe at that point I think having a written SLA of 90% uptime would probably be better.

    What do you think @randvegeta ?

    Like I said before. It then becomes a question of whether or not it is better to have a bad SLA or no SLA.

    @MikePT said:
    Just a note. I have seen many ridiculous ToS. Just because you write whatever you want there, laws still apply and are valid above any ToS. Even forcing the client to agree with it before signing up doesnt mean the ToS can state everything the providers want.

    Yes that is true. But where is the line drawn? Who determines what is reasonable or not? Is 90%? 50%? Does price factor into this?

    The problem with putting figures into an SLA is that if they are unreasonable then they are meaningless, especially if they are disregarded by law.

    I suppose there are no hosts that have a less than 90% uptime. But if you pay $3 for 12 months of hosting, and you get 90% uptime, is it reasonable to charge back?

  • MikePTMikePT Moderator, Patron Provider, Veteran

    @randvegeta said:

    @MagicalTrain said:

    @6ixth said:
    'so I should point out that on our LOW END services, we have a policy of No Refunds, No SLA and No Support.'

    So are you saying that if a server is offline for 99% of the contract time that a refund/support isn't justified at all because you wrote a sentence before ordering? I disagree, policies like this just make more problems for yourself and you may be better off charging a little bit more so you aren't getting 3 year old brats buying your stuff and you can offer support and an SLA on uptime.

    Earlier he mentioned that below 90% would be intolerable. But maybe at that point I think having a written SLA of 90% uptime would probably be better.

    What do you think @randvegeta ?

    Like I said before. It then becomes a question of whether or not it is better to have a bad SLA or no SLA.

    @MikePT said:
    Just a note. I have seen many ridiculous ToS. Just because you write whatever you want there, laws still apply and are valid above any ToS. Even forcing the client to agree with it before signing up doesnt mean the ToS can state everything the providers want.

    Yes that is true. But where is the line drawn? Who determines what is reasonable or not? Is 90%? 50%? Does price factor into this?

    The problem with putting figures into an SLA is that if they are unreasonable then they are meaningless, especially if they are disregarded by law.

    I suppose there are no hosts that have a less than 90% uptime. But if you pay $3 for 12 months of hosting, and you get 90% uptime, is it reasonable to charge back?

    Didnt mean to refer to the SLA specifically tho.

  • randvegetarandvegeta Member, Host Rep

    KermEd said: Risky as a low end host is, is a client really expected to continue on a service at that point? Sellers do have to be accountable - a service was still traded for cash, and placed like where I am have protections as a consumer, pushing blame on the seller for underpricing.

    You're not being totally unreasonable. I think much of it depends on what the service provider is offering.

    Now you may think that the host is responsible for keeping your data safe, and backed up. But if it is explicitly stated that the server is running on a single disk with no backups, then I think it would be unreasonable to expect such precautions to be made. After all, if you had a dedicated server with a single disk, it would certainly be up to the client to backup their own data.

    So long as the provider gets a new/fresh VPS back up and running within a reasonable time, then I think that should be fine. No compensation, credit should be due, and no blame or finger pointing would be deserved either. Again, imagine it was an issue with a dedicated server.

    KermEd said: So if you are seeing a lot of charge backs from difficult clients like me, maybe you should focus on what is wrong with the service you are providing...

    It's really a minority of our orders. Almost exclusively the problem comes from China users. Around 10% of all orders from China are problematic. And the issue is not us! The issue is they have unrealistic expectations. The most common being they are ordering a service that explicitly states that there is NO DIRECT ROUTE TO CHINA, and they complain about poor speeds to China. The explicit statement is plastered in bold caps on the product description, so it is impossible to miss. Why they order something unsuitable for them is beyond me.

    In the last week or so, since we released the NAT VPS on a single test node was that they can't access the server via the IP (because it's internal/private). Again, the product description clearly states it is a NAT VPS wit h a shared IPv4 address and 21 ports forwarded.

    If this is somehow the fault and responsibility of the host, then would that mean it is also reasonable for a restaurant to explicitly state that a beef burger contains meat, just in case the diner is vegetarian? I don't think so. The customer has some responsibilities too!

    If a vegetarian orders a beef burger, and is delivered that beef burger, I don't think it is reasonable to then claim that they did not know it had meat in it, or that they could not read the menu because they don't speak English. They ordered it, it was delivered, and they should pay, regardless of weather or not it was what they were expecting. If they get what they ordered, they should pay. Or am I wrong here?

    Thanked by 1that_guy
  • randvegetarandvegeta Member, Host Rep

    MikePT said: Didnt mean to refer to the SLA specifically tho.

    Same difference. A company's TOS/AUP/SLA is never binding if they infringe on a consumer's rights, guaranteed under the law. A TOS can have provisions for late payment penalties of $100 /minute, but that would not be legally binding. $1 /day might though... it depends on how reasonable (or indeed unreasonable) the policy seems relative to the type / cost of service.

    Presumably an SLA offering 50% up-time would not hold up.... On the other hand, offering a service that runs 12 hours a day might just fly? If you advertise 12 hours a day hosting, and you're actually up for 24 hours, that's 200% uptime :D

    Thanked by 1MikePT
  • @randvegeta said:
    Presumably an SLA offering 50% up-time would not hold up.... On the other hand, offering a service that runs 12 hours a day might just fly? If you advertise 12 hours a day hosting, and you're actually up for 24 hours, that's 200% uptime :D

    The question is who would sign up for a service that is only available half the possible (and usual) time?

  • @randvegeta said:
    It's really a minority of our orders... And the issue is not us! The issue is they have unrealistic expectations... The explicit statement is plastered in bold caps on the product description, so it is impossible to miss. Why they order something unsuitable for them is beyond me.

    >

    The systems are extremely unfairly sided with consumers. And almost entirely rely on consumers being honest. It depends on the why though.

    Restaurants are a bit different than automated services. The cost to deploy is typically pennies at most, and if someone made an honest mistake reading something and immediately asked for a refund, I fail to see what is to be gained by refusing the refund. I wouldn't want to profit off of someone and to teach them they can't trust me to help them when they make a mistake. But maybe that's just me, we sell digital services - not infrastructure - and trust with our clients is #1.

    If they filed a refund 9 months in because of an issue setting up their nameserver, that would be a very different & petty issue I would fight to the ends of the earth :).

  • KermEdKermEd Member
    edited December 2017

    @randvegeta said:

    MikePT said: Didnt mean to refer to the SLA specifically tho.

    Same difference. A company's TOS/AUP/SLA is never binding if they infringe on a consumer's rights, guaranteed under the law. A TOS can have provisions for late payment penalties of $100 /minute, but that would not be legally binding. $1 /day might though... it depends on how reasonable (or indeed unreasonable) the policy seems relative to the type / cost of service.

    This is a good point - my bank only cares that the company abided by our consumer protection laws. PayPal is the same otherwise they would get hit with a chargeback and end up paying for the service. TOS and Contracts carry little value here - but very few consumers actually know that.

    Thanked by 1MikePT
  • randvegetarandvegeta Member, Host Rep

    KermEd said: . The cost to deploy is typically pennies at most, and if someone made an honest mistake reading something and immediately asked for a refund, I fail to see what is to be gained by refusing the refund

    Paypal fees are non-refundable. Time to process refunds, and answer support tickets also cost time, which means man power. I do not see why the provider must bare the full cost of the customer's own mistake. If diner orders a hamburger, and get's a hamburger, they don't deserve a refund just because they are vegetarian and didn't realise they ordered meat. If there was a way to deal with all of this automatically, and free of any cost, that would be a different story. But at the moment, such option does not exist.

  • @randvegeta said:

    KermEd said: . The cost to deploy is typically pennies at most, and if someone made an honest mistake reading something and immediately asked for a refund, I fail to see what is to be gained by refusing the refund

    Paypal fees are non-refundable. Time to process refunds, and answer support tickets also cost time, which means man power. I do not see why the provider must bare the full cost of the customer's own mistake. If diner orders a hamburger, and get's a hamburger, they don't deserve a refund just because they are vegetarian and didn't realise they ordered meat. If there was a way to deal with all of this automatically, and free of any cost, that would be a different story. But at the moment, such option does not exist.

    This is a good point, actually. Processing fees do not get refunded, so even if you are not-an-asshole and ask for a refund, rather than charging back/etc, the host is still on the hook for $0.35+/etc per transaction, and possibly more for reversals/et al..

  • randvegetarandvegeta Member, Host Rep

    WSS said: This is a good point, actually. Processing fees do not get refunded, so even if you are not-an-asshole and ask for a refund, rather than charging back/etc, the host is still on the hook for $0.35+/etc per transaction, and possibly more for reversals/et al..

    Yes. And Paypal are not the only gateway to not refund fees. As far as I know, no gateway service provider offers fee free refunds. 2CO for example does not refund any of the fee once the payment has actually been processed. You can only cancel the transaction to avoid fees, but you need to do that within a very short time-frame.

    The fees may seem small, but they do add up on volume services, and the margins are near zero to begin with. Best not to entertain the notion IMO.

  • randvegetarandvegeta Member, Host Rep

    bitswitch said: The question is who would sign up for a service that is only available half the possible (and usual) time?

    It may seem silly, but for the most part, people don't actually use their super cheap VPS all day every day. So long as the VPS is available when they need it, it probably isn't an issue if the machine is down. Generally people sleep at night, so it could be a server that runs between 10am and 10pm. Realistically the server would run 24/7 any way, but if you only offered it as a 10am-10pm service, and the server were to go down for any reason between 10pm and 10am, then there would be no real reason to complain and the host could have a nice and restful sleep as they would not be obliged to fix it till they get to work in the morning :-)..

    A host can dream can't they? Full, restful nights! Sweet sweet paradise!

  • @WSS said:
    This is a good point, actually. Processing fees do not get refunded, so even if you are not-an-asshole and ask for a refund, rather than charging back/etc, the host is still on the hook for $0.35+/etc per transaction, and possibly more for reversals/et al..

    Fair point, but if that's the chief concern, they could still refund minus the 30 cents through a partial refund fairly painlessly.

  • @KermEd said:

    @WSS said:
    This is a good point, actually. Processing fees do not get refunded, so even if you are not-an-asshole and ask for a refund, rather than charging back/etc, the host is still on the hook for $0.35+/etc per transaction, and possibly more for reversals/et al..

    Fair point, but if that's the chief concern, they could still refund minus the 30 cents through a partial refund fairly painlessly.

    ..and many of these problematic customers would issue a Chargeback to ensure they got their $0.30(+/-) back.

  • KermEdKermEd Member
    edited December 2017

    @randvegeta said:
    Paypal fees are non-refundable. Time to process refunds, and answer support tickets also cost time, which means man power. I do not see why the provider must bare the full cost of the customer's own mistake. If diner orders a hamburger, and get's a hamburger, they don't deserve a refund just because they are vegetarian and didn't realise they ordered meat. If there was a way to deal with all of this automatically, and free of any cost, that would be a different story. But at the moment, such option does not exist.

    Hamburgers, however, are not digital automated virtual services. You didn't create something that can never be used again and painstakingly craft it in a kitchen. In fact, no involvement is done at all with the exception of maybe replying to a message. Very different comparison IMO.

    I do get support tickets cost time & the cost for payment fees could start to add up. But that is the industry - so the question what can you do to stop the tickets from coming in. Refusing the refund doesn't stop the support ticket times. And it would be much better to spend that time with legitimate interested and happy clients.

    I don't envy the situation but I just personally feel that fighting a refund request from an honest mistake is treating the symptom, not the issue ... :)

  • @WSS said:

    ..and many of these problematic customers would issue a Chargeback to ensure they got their $0.30(+/-) back.

    Some might. But I imagine refusing a refund over a 30 cent fee is going to force them to do chargebacks. And the ones that would fight a partial refund over a chargeback probably wouldve just started with a chargeback.

    Pizza has arrived - mmmm bye all

  • randvegetarandvegeta Member, Host Rep

    KermEd said: Refusing the refund doesn't stop the support ticket times.

    Actually it does because those same people go and complain to other people like them and those people never end up ordering. Actually you see it all the time here on LET where someone complains about a provider, and the community ridicule that person for having unreasonable expectations of that provider. It's refreshing actually!

    KermEd said: I don't envy the situation but I just personally feel that fighting a refund request from an honest mistake is treating the symptom, not the issue ... :)

    I don't think being an 'honest' mistake is a fair reason to grant a refund. If a Chinese Vegetarian makes an honest mistake and orders a burger because they didn't understand the menu, does that entitle him to a refund? It was an HONEST mistake after all! I don't think so. There are real costs incurred to providing the service. Automated or not, there are cost. If you go to a vending machine and accidentally buy a Fanta instead of a Coke, does that entitle you to a refund? That's automated! Again no. The handling of such cases would cost more than the value of the product/service

    KermEd said: Some might. But I imagine refusing a refund over a 30 cent fee is going to force them to do chargebacks. And the ones that would fight a partial refund over a chargeback probably wouldve just started with a chargeback.

    These customers almost never ask nicely for a refund. 99% of the time, they hit the Paypal dispute button. Hitting this button prevents the possibility of providing a partial refund, and the funds get locked up. In fact, at this stage, the host will be left with 2 options, and both incur costs. 1 is to simply refund and suck up the costs. The other is to challenge and spend time. We used to refund, but it's a soul destroying thing to do. Even if it technically cost more, it's more satisfying to simply challenge it, collect evidence and win! A financial loss, but a principled victory! We've also started to put those people on Fraud Record... Again, that's a bit of a waste of time and effort to do, but it may help other hosts and warn them of such problem clients.

    Best reason for using crypto is not having to deal with this type of crap.

  • @randvegeta I was with you until you said "Chinese". Now you're an instant racist like the rest of us, because it's obviously hatred rather than a disdain for someone too arrogant or ignorant to understand what they're ordering.

  • randvegetarandvegeta Member, Host Rep
    edited December 2017

    @WSS said:
    @randvegeta I was with you until you said "Chinese". Now you're an instant racist like the rest of us, because it's obviously hatred rather than a disdain for someone too arrogant or ignorant to understand what they're ordering.

    But I am Chinese.... How can I be racist against my own kind?

    Besides, I was using an actual example of an excuse that was given by one customer who charged back. They claimed they did not understand our website because they don't read English. Even if true, it's not a reasonable excuse in my mind. I don't blindly buy stuff from Japanese online stores....

  • WSSWSS Member
    edited December 2017

    @randvegeta said:

    @WSS said:
    @randvegeta I was with you until you said "Chinese". Now you're an instant racist like the rest of us, because it's obviously hatred rather than a disdain for someone too arrogant or ignorant to understand what they're ordering.

    But I am Chinese.... How can I be racist against my own kind?

    Besides, I was using an actual example of an excuse that was given by one customer who charged back. They claimed they did not understand our website because they don't read English. Even if true, it's not a reasonable excuse in my mind. I don't blindly buy stuff from Japanese online stores....

    Yes, well, I guess you've missed the backlash of "Just block China" responses for loss-leader sales, DediCenter's non-payout to a blogger, and ServerHands' excuse for going bankrupt.. plus, whoever @dzungbb is, they think I am anti-Asian because I made a "No Chinese processing" joke yesterday and shit on my wall for the hell of it.

    It's quite possible to dislike your own race, but sociology is also far beyond the spec of this thread. :D

  • randvegetarandvegeta Member, Host Rep

    @WSS said:

    @randvegeta said:

    @WSS said:
    @randvegeta I was with you until you said "Chinese". Now you're an instant racist like the rest of us, because it's obviously hatred rather than a disdain for someone too arrogant or ignorant to understand what they're ordering.

    But I am Chinese.... How can I be racist against my own kind?

    Besides, I was using an actual example of an excuse that was given by one customer who charged back. They claimed they did not understand our website because they don't read English. Even if true, it's not a reasonable excuse in my mind. I don't blindly buy stuff from Japanese online stores....

    Yes, well, I guess you've missed the backlash of "Just block China" responses for loss-leader sales, DediCenter's non-payout to a blogger, and ServerHands' excuse for going bankrupt.. plus, whoever @dzungbb is, they think I am anti-Asian because I made a "No Chinese processing" joke yesterday and shit on my wall for the hell of it.

    It's quite possible to dislike your own race, but sociology is also far beyond the spec of this thread. :D

    Will just spin of the ultra budget stuff to a new brand that only accepts crypto and push support to a public forum... That should done everything.

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