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Sneakwrap Files: McAfee Automatic Renewals | 85 comments (85 topical) | Post A Comment
Use Your Credit Card Company to Resolve Disputes[ Reply to This ] (none / 0) (#13)
by Anonymous User on Mon Jan 12, 2004 at 12:24:13 PM PDT

Until recently I ran an online site that took credit cards. Now that I'm out of that, I can reveal some secrets of how to deal with problems from online services like McAfee or even hardware sellers like Dell. The main weapon the consumer has, and it's the one most dreaded by merchants (especially online merchants), is the CHARGEBACK. You as the holder of the credit card have the right to put any charge into dispute. If you successfully dispute the charge, that results in a chargeback to the merchant whereby the credit card company takes back all money received by the merchant for the transaction, plus a penalty fee (often $20) assessed to the merchant. All merchants, even companies that have gone out of business, have reserve accounts set aside by their bank to cover the costs of chargebacks and fees. Not only that, when you file a dispute, the merchant's own bank may charge them a fee just to handle the dispute (called a 12B letter of inquiry). Finally, the credit card companies have maximum ratios of chargebacks for any merchant (usually 1% to 2.5% of sales), so if only 3% of consumers learn to complain quickly and often, merchants like McAfee will have to modify their policies. Even better for the consumer, if the merchant doesn't counter the customer's claim in a timely fashion, you win! And in some cases, the merchant will be required to supply its bank either with a credit card slip signed by you or proof of delivery of goods to your address. Needless to say, online purchases of services, or software that is downloaded, have no signed credit card slips. Even though the bank that issued your credit card will often tell you that you can only dispute your current bill within 30 days (sometimes they'll say 60 or 90 days), in fact banks often allow chargebacks as far back as 6 months, particularly in the case of online monthly billing, and occasionally even up to a year. Many banks won't let their merchants issue subscriptions for more than 90 days, and virtually none allow yearly rebilling like McAfee is doing, so it could be McAfee is in violation of either their merchant agreement and/or credit card company rules. However, giant merchants like McAfee and Dell probably have much sweeter bank agreements than smaller merchants, so their banks might be more tolerant. But it's the bank that issued your credit card that you're dealing with, not theirs. In fact, my best advice is to always use an American Express card for any purchase, online or off, because AmEx likes to keep their customers happy, and there is no intervening bank, you're dealing directly with AmEx. Furthermore, AmEx's agreements with some online merchants give no option to defend themselves, so if AmEx believes you, you've won. I can also tell you Visa is the last card I would use to purchase anything with. And if your bank gives you grief about filing a dispute, get a new card somewhere else--but insist on filing the dispute anyway. As part of your filing of a dispute, include newspaper stories, columns like Ed's, and links to the merchant's obscure terms as supporting evidence. If the merchant is difficult for you to reach about your charge, that's evidence of violation of credit card rules. And if you didn't authorize the charge or receive the goods (or can't honestly remember), say so. The merchant will have to prove otherwise.

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Sneakwrap Files: McAfee Automatic Renewals | 85 comments (85 topical) | Post A Comment
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