Legal Question in Business Law in California

Merchant service company

I have online business and most of payments made via extremely big merchant card service company. However, there are so many hackers outthere using stolen credit card and purchased the item and we, online sellers get chargebacks right and left. I have over $20,000 being held because of these fraudulent activities. I can't run my business like this losing money constantly. I want to sue this company for approving all these fradulent cards transactions in the first place and damaging my business. I need a serious help on this and please please give me some advice!


Asked on 4/10/09, 2:27 pm

2 Answers from Attorneys
Timothy J. Walton Internet Attorney

Re: Merchant service company

The issue is one of contract law. If you agreed to the terms of the contract, then you cannot fault the credit card processor for adhering to the terms.

That said, you might want to speak with a knowledgeable attorney about whether the processor is following the contract, about whether there are steps you can take on your end to eliminate or reduce chargebacks, and/or whether you want to find a different credit card processor.

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Answered on 4/15/09, 12:37 pm
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

Re: Merchant service company

I sympathize with your situation. I have had the same problem. They want to hold payments for 120 days after collected from the cards in some instances or close the account. It would be a tough and long haul to sue the bank underwriters. They will pass blame to the account holders lack of credit. If you want to litigate I would be happy to take on your cause. Contact me directly.

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Answered on 4/11/09, 1:52 pm


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