Credit Card Fraud Hurts Small Businesses, Too
Putting your finances back together after someone steals your credit card information is time-consuming and stressful. At least credit card companies usually give consumers the benefit of the doubt that they are telling the truth about the charges being fraudulent, and even though it takes time, you can usually get the money back that the fraudsters took from you. In fact, credit card companies try to stop credit card fraud before it starts. This is why you often get text messages asking you whether the person making the purchase is really you when you pay at stores, restaurants, and hotels using your credit card while traveling. Purchases made by stolen credit cards are disruptive for small businesses, too, but not in quite the same way as for consumers. A Washington DC small business lawyer can help you protect your small business from financial losses stemming from fraudulent credit card charges.
Credit Card Companies Have Your Back, but Only Sometimes
When a customer disputes a charge on their credit card, alleging that the charge is fraudulent, the credit card company will begin an investigation. If they find that the customer’s allegations have merit, the company will issue a chargeback, which means that they will refund the money to the customer’s available credit. This is great for the customer, but where does it leave the business where the fraudulent transaction took place? If the credit card company undoes the transaction, then the business loses money.
This is only the worst-case scenario for businesses, though; it does not happen in the case of every fraudulent transaction. Whether you will automatically get your money after a customer makes a fraudulent credit card transaction at your place of business depends on the cardmember agreement. Some cardmember agreements require credit card companies to cover the cost of fraudulent purchases under certain circumstances, so that the businesses where the fraudulent purchases take place, which are also victims of the fraud, do not lose money. Unfortunately, you cannot know the details of cardmember agreements, because they are between the customer and the credit card company.
How to Dispute a Fraudulent Chargeback
If a credit card company did a chargeback on a transaction made at your place of business, you have the right to dispute the chargeback so that the credit card company will pay you the money and add the charge to the customer’s credit card balance. If you do this, the burden of proof is on you to persuade the credit card company that the charge was genuine. The best way to do this is to provide a receipt signed by the customer, so that the credit card company can verify it. If possible, you can also show security camera footage where the customer can be seen making a purchase at the time of the disputed charge.
Let Us Help You Today
A small business lawyer can help you protect your small business from financial losses related to fraudulent credit card transactions. Contact Tobin, O’Connor & Ewing for help.