Congressmen Hensarling and Roskam,
I am writing this to you as one of the millions of merchants (voters) across the USA who accept credit cards for payment. As you have been made aware in the last few years many card issuing banks have begun rejecting legitimate chargeback replies even though merchants are filling the replies out in great detail proving the original charge is legitimate and the chargeback complaint should be removed and decided in favor of the merchant. It has gotten so bad that on some of the chargebacks a 5 year old child could see that the cardholder is simply trying to steal merchandise and/or services from the merchant. Frivolous chargebacks allowed to be presented by the card issuing bank is an obvious violation of Federal Regulations E and Z. They are also a form of felony theft by the cardholder. This is causing merchants and the US Government millions of dollars in lost revenue.
Also the card associations’ chargeback procedures leave much to be desired. In the typical non efficient ways of MC/Visa/Discover nothing official ever comes if you win. Only if you lose. Incidentally the cardholder’s issuing bank makes the determination not the merchant’s credit card company. Kind of a kangaroo court! American Express is somewhat better on these issues because they see both sides of the transaction.
We also need a better way to monitor the chargeback progress after it has been filed. Currently there is basically nothing.
And besides “Friendly Fraud” we need a better way to check the validity of all online (eCommerce) and phone orders for outright fraud (identity theft) which would also help in replying to “friendly fraud” chargebacks. In addition to address and zip code check we need to be able to check the cardholder’s name and email address currently not offered by MC/Visa/Discover. American Express does offer email address verification.
We also need the card associations MC/Visa/Discover/American Express to recognize email delivery of merchandise as valid Proof of Delivery.
The verification for foreign cards is even worse causing merchants to decline many legitimate foreign card orders which loses millions of dollars in revenue for merchants and tax revenues for the US Government.
We would also like to see a user friendly way for merchants to report cardholders for felony theft and prosecution. Currently most Police Departments ignore these requests even if the theft committed is in the six figures.
The airline industry has taken a first step in forcing Visa to modify their policies and procedures http://www.eturbonews.com/60006/visa-amends-rules-help-airlines-reduce-card-not-present-fraud
Feel free to contact me for more details.