Hello everyone, my husband is a small time trader who also sells online engaging ipay88 as the Payment Gateway system. As usual, he will receive credit card payments through the company website (payment managed by ipay88) and then proceed to deliver the items via courier service or COD.

Then one day, after 5-6 months, the buyer disputed the transaction. Claiming that he did not buy the items. But my husband, upon seeing the authorized transaction then had already delivered the items to the buyer. Now, all ipay88 claim that they can do is ask us to contact the buyer to ask him to cancel the dispute. This is unlikely to happen because, after so long, the buyer is uncontactable as he has changed his hp number. Secondly, it could be a case of misused credit card issue whereby the credit card owner really did not make the purchase. How can the company absolve the responsibility just because the bank has raised a dispute on this? It is a very big amount amounting to thousands. Because of the negligence by ipay, we could potentially lose double the amount that is the cost of the stock and the selling price which ipay88 is demanding from us. We have already furnished receipts (with buyer's signature) as proof of sale and receipt to ipay88. The whole system seems unfair to us as it only protects the consumers and big companies like ipay88. Small time merchants are left in the lurch.

Any sifus can guide us on what we can do in this case? It is very unfair to us, genuine sellers as we engaged ipay88 in trust that they are providing reliable payment gateway solutions. It baffles me that they can authorize the credit card transaction, and dispute it 5-6 months later! We merely perform normal business procedures and got caught in this sticky situation due to them not having stringent procedures to prevent chargebacks like this from occurring. Please guide us, if u have any experience as I'm feeling really helpless and sad right now. Thank you.

This post has been edited by veronicachant: Feb 15 2017, 12:35 PM

Chargebacks are always merchant's own responsibility, no payment gateway will absorb it, which is also why most small merchants prefer to sell on platforms like lazada/11street/etc.

The bigger e-commerce merchants actually absorb these chargebacks as part of their operational cost. Anyway, if you prefer to fight this chargeback case, first of all you have to ask all the details from ipay88 (i.e. transaction approval details like 3D secure info, dispute reason code etc), forget about asking ipay88 to fight on your behalf, as no payment gateway will do this for their merchants.

this happens all the time, even places like lazada and 11street doing the same thing to their seller too (if im not mistaken). parking here too, my friend used to operate a restaurant and face the same thing. bank call, asking for signature, cctv etc etc... and in the end he has to absorb the amount as well. parking here to see any other solution to solve this.

If i'm not mistaken, PayPal has similar loophole as well. Yes it's a loophole, not negligence & yes it's favoring the buyers. So some dedicated scammers are scamming businesses this way. There are some threads on similar cases with PayPal; scammer disappear after receiving the item & disputed the transaction with PayPal.

Red flag #1 - disputed transaction. I've personally experience this & the banks will contact the buyer & reveal all the transaction details including e.g. time of purchase, item bought, the location etc. Then will ask again if the buyer still want to proceed with the dispute.

Red flag #2 - number unreachable after 6 months. Coincidence? How likely someone disappear after winning a dispute case?

Why do you have to pay ipay88? You item is gone & ipay88 refunded the scammer, how could ipay88 ask you to pay on the scammer's behalf?

Look at the Top Online Payment in Malaysia chart. Then study your own customer behavior, do they usually use those payment gateway? After all those consideration, decide for yourself how you wanna learn from this incident. If all your products are costly, you might wanna remove ipay88 & PayPal services off entirely. Unless more than half of your transaction is paid via ipay88.

My definition of costly; high margin or low margin. If you margin is hovering around 10%, that's costly for me. If your margin is 200%, probably can absorb the loss if it's not too frequent.

This post has been edited by NightHeart: Feb 15 2017, 08:56 PM

If your merchant is VBV (Visa) enabled tell your merchant to refer to the bank how the transaction can get approved. If it's not VBV then you got to absorb.

I believe your merchant payment is via online and payment must go through the ECC whereby the code is used to SMS the owner and to enter the correct code.

Without such code, the payment will not be succeeded.

If really someone misused the credit card, I don't think he could able to hack the SMS system to get the code unless he is real pro.

Check with ipay and request all chargeback information from them to know when the owner initialed the chargeback.

Also, when the transaction is approved, owner will receive a other SMS...

I would say the real owner is scammer instead.

I am interested in this topic and would like to know the outcome as I have been involved in such dispute before by buyer.

This is a very good tip. Thank you for suggesting that we get the details from ipay88.

Hmm if no payment gateway will absorb chargebacks, then it fails to provide merchants with a sense of security. We engaged them in good faith that they allow non-fraudulent transactions to go through. We merely operate by noting that payment has come in, then we proceed to deliver the goods and do business as usual. I would think that they should have more security checks and protocols to protect its merchants from scammers.

According to your Red Flag #1, banks still give the benefit of doubt to the buyers. Merchants who can proof delivery and sales transaction are still in the lurch because then the buyers claim that it wasn't an authorized transaction.

Actually it's quite obvious that it was an intentional scam but it only surfaced after 6 months (which is well within their allowable period) but sadly, merchant has already incurred all the costs and could face a double loss. It's really unfair for ipay88 to ask us to bear the loss of the cost as they were the ones who approved the transactions and credited the money to our bank account. Hopefully, we can fight this case and win it.

This is a good point. Thank you for your advise.

If credit card is chargedback in Lazada and 11street they wouldn't force their merchants to bear the loss unlike payment gateways like MOL and ipay88?

Thanks. Hope this can be a good point of contention.

But then again, some payment websites like Groupon whereby the credit card info is saved then no ECC SMS is required. Have encountered before where I thought that I would need the SMS Code but none was received. Nevertheless, I should go get all the info you pointed out there from ipay88. Never thought of that before. I do believe the real owner is the scammer or they work in a group. Thank you again for pointing this out as we were always thinking of defending ourselves by proving the authenticity of the transaction instead of questioning them back. Thank you.

They won't, technically lazada/11street will be the merchant for the transaction, they will absorb the credit card fraud.

Below is Lazada's statement about it:-

Lazada (directly or indirectly through a third party at its sole discretion) will bear the risk of credit card fraud (e.g. fraudulent
purchases arising from the theft or unauthorized use of a Customer’s credit card information) occurring in connection with the
Transactions, except with respect to Transactions that the Seller does not fulfil in accordance with the Order information. The Seller will
bear all other risk of fraud or loss. The Seller will promptly inform Lazada of any changes to the nature or specifications of the Goods or any
pattern of fraudulent or other improper activity with respect to any of the Goods that may result in a higher incidence of fraud or other
impropriety associated with Transactions involving the Goods.

so who will absorb the chargeback? Lazada? 11street? i dont think so. this is just a dispute, but most of the seller will wash hands as its just a selling platform. zzzz

https://forum.lowyat.net/index.php?showtopic=4061011&hl=

This post has been edited by klthor: Feb 21 2017, 05:48 PM

Please keep us updated your case.

About the ECC code, regardless the info is saved or no, all payments must be directed to such website to enter code. If there is no, the system provider or payment processor should be liable for fraud case.

Please query this info as well to check the ECC code if that was sent or entered by the buyer.

Thank you. That is more reassuring.

In this case, the gateway providers should step up and bear some risk instead of merely acting as an "independent" intermediary platform for transactions only.
In case you know of any gateway providers besides ipay88 that would bear the risk of credit card fraud, please let me know. Thank you.

Forummer yusiang above pointed out that Lazada will bear the cost. Hmm.

Now, we awaiting further investigations. Really hope that they won't pass on the risk to us. Besides it being a matter of principle, this amount is also significant to a small time trader like us as compared to the big companies.

Noted on the info of the ECC code. This could be an interesting point to back us, the small time merchants. Thank you.

There is none, even those famous one worldwide like braintree and stripe also dont bear that.

Hello all,

I have been looking at this thread and dispute thread and nothing is about being scammed by customers.

I Wanted to ask, if you are a customer and you bought smtg more than 10k online somewhere around (eg July) and you would like to file a dispute with the bank that you did not receive any items. Should this be done immediately or you have a plenty of time to do so becoz the bank would still entertain this case ? Because the bank entertained this customer and is asking any form of proof of delivery from the merchant.

Scenario
July : Buyer (scammer) bought rm10k worth of items online using cc. His orders went through Succesfully (verified by marketplace). Buyer requested for cod and seller agreed to cod (but without proof of collection by buyer eg: siggy, ic,etc, traces of conversations have been deleted - YES STUPID )
Seller then updated the orders to self pickup and acknowledged delivered by marketplace.

Aug- nov : peaceful transaction... No complaints..

Dec : seller being informed by marketplace that customer has filed dispute to the bank that he nvr received any items from cod. Marketplace was ready to charge back Rm10k to seller since without solid proof of delivery to the acquiring bank.

My question :
seller being informed of this dispute in dec but not immediately (perhaps august, a month after he realised he did not receive any items from seller?) the gap between july and dec is far too long for the buyer to file this dispute. I wonder if the buyer really reported in aug but the bank took 3-4 months to inform the seller ? Or the bank accepts dispute regardless how long (180 days-365 days) as long as the buyer claimed he never received the items ??
-what possibility and logic of that buyer to file dispute to the bank after several months not receiving the item ?
-What possibility and logic of the bank to accept dispute of a case that happened so long ago ?
- wondering if the buyer is a genuine lost card holder ? Buyer is no longer contactable... Hmmm

Chances are slim to seller since no solid proof of delivery but marketplace is charging seller over negligence ? Marketplace claimed bank do not care since no solid proof of delivery.

Police report will be lodged but can police report benefits the seller ?

This post has been edited by kawa_e: Mar 8 2017, 11:55 PM

I thought I saw something similar not too long ago. Someone familiar with the chargeback confirmed that seller would not receive the money. Hence better to sell on platform like lazada who will absorb these cases for a few percentage of your profit.