Credit card disputed charge (fake merchandise). What to do next?

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Weathering
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Joined: Sun Oct 15, 2017 4:20 pm

Credit card disputed charge (fake merchandise). What to do next?

Post by Weathering »

Update to say this has been resolved. Thank you for everyone’s helpful insight.
Last edited by Weathering on Sun Jan 23, 2022 4:36 pm, edited 1 time in total.
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galawdawg
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Location: Georgia

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by galawdawg »

Weathering wrote: Thu Jan 20, 2022 11:53 am I’m hoping that someone else has been in this situation and can provide me with advise on what to do next.

Just before Christmas my spouse saw a Zales ad on Facebook. The link went to a website that appeared to be a Zales site but didn’t have a Zales URL (it was like a Zales.Shopme.com URL). My spouse purchased a ruby ring made of 10k white gold for $110. This was supposedly a special of the day and valued at $800. Immediately the next morning a realization came to light that it was a scam. An email was sent requesting a cancellation of the order and we notified our credit card company. A new credit card was issued and a fraud dispute was opened for the disputed charge. We provided evidence such as the fact that the website was no longer in existence (URL was noted in transaction receipt so it was clear that had been the URL used before it was taken down).

Fast forward to yesterday, we received a letter from our credit card company stating that the determined no billing error has occurred. However, they are going to continue to attempt to recover the funds through Visa’s pre-arbitration phase of the dispute (approximately 60 days). If they are not able to recover the funds then they will re-enter the charge on our card and we will be required to pay it.

Note: since we filed the dispute a ring was delivered. It has 5 tiny (presumably fake) diamonds and is made of plastic. It is definitely not a ruby ring, nor 10k white gold, there is also not any receipt that would indicate it is a Zales ring. So, it is 100% fake yet it appears I am going to have to pay $110 for it unless I can figure out what to do next?

This credit card is from a massive military-affiliated credit union (and has 2% rewards), so I will continue doing business with them even if this dispute is not decided in our favor.
Do you have a screen printout from the purchase showing that it was purportedly from Zales and that it was a ruby ring make of 10k white gold valued at $800?
seawolf21
Posts: 1590
Joined: Tue Aug 05, 2014 7:33 am

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by seawolf21 »

Ask your bank if they disputed as "Not as Described or Defective Merchandise/Services"

Page 726 - https://usa.visa.com/dam/VCOM/download/ ... public.pdf

Merchant will be given opportunity to respond dispute is not valid or refund. If they respond charge is not valid, have your bank reopen and be prepared to provide details described on page 730.

If merchant still respond charge is valid, your bank may choose to credit you out of their own pocket or you can have your bank initiate arbitration with VISA. VISA may charge a fee for this.
Last edited by seawolf21 on Thu Jan 20, 2022 4:22 pm, edited 1 time in total.
Newaygo
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Re: Credit card disputed charge (fake merchandise). What to do next?

Post by Newaygo »

Check out https://www.elliott.org/ . This is a non-profit consumer advocate site and you should be able to find guidance. Overall, it is an excellent consumer advocate site.
AlphaLess
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Location: Kentucky

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by AlphaLess »

Weathering wrote: Thu Jan 20, 2022 11:53 am I’m hoping that someone else has been in this situation and can provide me with advise on what to do next.

Just before Christmas my spouse saw a Zales ad on Facebook. The link went to a website that appeared to be a Zales site but didn’t have a Zales URL (it was like a Zales.Shopme.com URL). My spouse purchased a ruby ring made of 10k white gold for $110. This was supposedly a special of the day and valued at $800. Immediately the next morning a realization came to light that it was a scam. An email was sent requesting a cancellation of the order and we notified our credit card company. A new credit card was issued and a fraud dispute was opened for the disputed charge. We provided evidence such as the fact that the website was no longer in existence (URL was noted in transaction receipt so it was clear that had been the URL used before it was taken down).

Fast forward to yesterday, we received a letter from our credit card company stating that the determined no billing error has occurred. However, they are going to continue to attempt to recover the funds through Visa’s pre-arbitration phase of the dispute (approximately 60 days). If they are not able to recover the funds then they will re-enter the charge on our card and we will be required to pay it.

Note: since we filed the dispute a ring was delivered. It has 5 tiny (presumably fake) diamonds and is made of plastic. It is definitely not a ruby ring, nor 10k white gold, there is also not any receipt that would indicate it is a Zales ring. So, it is 100% fake yet it appears I am going to have to pay $110 for it unless I can figure out what to do next?

This credit card is from a massive military-affiliated credit union (and has 2% rewards), so I will continue doing business with them even if this dispute is not decided in our favor.
Lots of red flags, but given that they gave you a plastic ring for what was supposed to be a 10k white gold, you should be in the clear.

I have an experience.

A long time ago I ordered something from one of those fly-by-night websites. Let me explain. They have a catchy URL, so occasionally, when you search for some product on Google, they come up at the top. Looks like an established website, with lots of reviews, etc, and sell pretty much anything.

I took careful notes. My order took a LONG time to arrive. During that time, when I made inquiries, several times, they wrote kind e-mails: "It would be one more day, one more day, one more, day, etc". Finally, when the product arrived, I was not happy with the qualify. Sure, it was usable, but it was described as a PREMIUM product, and I think the same quality, or better, could be had for a lot less money.

I e-mailed them. Their approached changed to nuclear stand-off. They kept sending me some strictly worded messages and links to their websites. Now, here is the kicker. The wording for "REFUND" was different from what I purchased (and I had a PDF copy of the FAQ including the REFUND wording).

(In hindsight, I should have just canceled after it was delayed for weeks)

So, I politely told them that I won't be dealing with them, and that I will give them a charge-back. I collected all the evidence, and send to Chase. And Chase told them to "f-off". As soon as the charge-back happened, they started begging me:
- why did you charge back,
- why couldn't we solve this amicable,
- do you want to take the charge-back back, and we can negotiate,

I wrote them a letter that this is the last time I am writing them, and that they can get lost.

Here is the kicker. They write back a letter, with poor punctuation, etc, that they are going to sue me in court. All of this from Australia. I told them they are welcome, but that I have experience in small claims court, and that if they sue me, I would collect not only my attorney fees, but also more.

Now, a scam with an Australian domicile, operated out of some poor Pacific island: there is no way they are going to have the resources to sue me.

So, I took their $110 product to Goodwill, and got my money back.

That's how you fight scam and crime.

They periodically COMPLETELY change their marketing, generating a very similar looking website, with different color themes, and a completely different URL, and entity name.

I am not even sure if they are based in Australia.
For all we know, they tell they Australian clients that they are based on Canada.
I don't carry a signature because people are easily offended.
PluckyDucky
Posts: 346
Joined: Tue Jan 15, 2019 7:29 pm

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by PluckyDucky »

If they try to make you pay, dispute it again once you get the statement in accordance with 15 USC 1666.

Technically, the billing error dispute resolution requirements do not apply until after the creditor transmits the statement of account. It counts as transmitted if you view it on the website.

https://www.law.cornell.edu/uscode/text/15/1666

(a)Written notice by obligor to creditor; time for and contents of notice; procedure upon receipt of notice by creditor
If a creditor, within sixty days after having transmitted to an obligor a statement of the obligor’s account in connection with an extension of consumer credit, receives at the address disclosed under section 1637(b)(10) of this title a written notice (other than notice on a payment stub or other payment medium supplied by the creditor if the creditor so stipulates with the disclosure required under section 1637(a)(7) of this title) from the obligor in which the obligor—
(1)sets forth or otherwise enables the creditor to identify the name and account number (if any) of the obligor,
(2)indicates the obligor’s belief that the statement contains a billing error and the amount of such billing error, and
(3)sets forth the reasons for the obligor’s belief (to the extent applicable) that the statement contains a billing error,
the creditor shall,
...
(B)not later than two complete billing cycles of the creditor (in no event later than ninety days) after the receipt of the notice and prior to taking any action to collect the amount, or any part thereof, indicated by the obligor under paragraph (2) either—
...
(i)make appropriate corrections...or
...
(ii)send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement and, upon request of the obligor, provide copies of documentary evidence of the obligor’s indebtedness. In the case of a billing error where the obligor alleges that the creditor’s billing statement reflects goods not delivered to the obligor or his designee in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless he determines that such goods were actually delivered, mailed, or otherwise sent to the obligor and provides the obligor with a statement of such determination.
...
(b)Billing error
For the purpose of this section, a “billing error” consists of any of the following:
...
(3)A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction.
...
(e)Effect of noncompliance with requirements by creditor
Any creditor who fails to comply with the requirements of this section or section 1666a of this title forfeits any right to collect from the obligor the amount indicated by the obligor under paragraph (2) of subsection (a) of this section, and any finance charges thereon, except that the amount required to be forfeited under this subsection may not exceed $50.

See also: https://www.consumerfinance.gov/rules-p ... s/1026/13/

3. Transmittal. If a consumer has arranged for periodic statements to be held at the financial institution until called for, the statement is “transmitted” when it is first made available to the consumer.

(e) Procedures if billing error occurred as asserted. If a creditor determines that a billing error occurred as asserted, it shall within the time limits in paragraph (c)(2) of this section:

Official interpretation of 13(e) Procedures If Billing Error Occurred as Asserted
Show
(1) Correct the billing error and credit the consumer's account with any disputed amount and related finance or other charges, as applicable; and

(2) Mail or deliver a correction notice to the consumer.

Also, TILA provides for a private right of action for violating Parts B, D, E. Credit Billing is in Part D.
Last edited by PluckyDucky on Thu Jan 20, 2022 1:53 pm, edited 5 times in total.
PluckyDucky
Posts: 346
Joined: Tue Jan 15, 2019 7:29 pm

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by PluckyDucky »

Also check your card terms and conditions to see what they say about this situation. If you don't have a copy and they aren't on your web account, the one on file with the CFPB should be current.

https://www.consumerfinance.gov/credit- ... dit-union/
seawolf21
Posts: 1590
Joined: Tue Aug 05, 2014 7:33 am

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by seawolf21 »

PluckyDucky wrote: Thu Jan 20, 2022 1:38 pm If they try to make you pay, dispute it again once you get the statement in accordance with 15 USC 1666.

Technically, the billing error dispute resolution requirements do not apply until after the creditor transmits the statement of account.

https://www.law.cornell.edu/uscode/text/15/1666

(a)Written notice by obligor to creditor; time for and contents of notice; procedure upon receipt of notice by creditor
If a creditor, within sixty days after having transmitted to an obligor a statement of the obligor’s account in connection with an extension of consumer credit, receives at the address disclosed under section 1637(b)(10) of this title a written notice (other than notice on a payment stub or other payment medium supplied by the creditor if the creditor so stipulates with the disclosure required under section 1637(a)(7) of this title) from the obligor in which the obligor—
(1)sets forth or otherwise enables the creditor to identify the name and account number (if any) of the obligor,
(2)indicates the obligor’s belief that the statement contains a billing error and the amount of such billing error, and
(3)sets forth the reasons for the obligor’s belief (to the extent applicable) that the statement contains a billing error,
the creditor shall,
...
(B)not later than two complete billing cycles of the creditor (in no event later than ninety days) after the receipt of the notice and prior to taking any action to collect the amount, or any part thereof, indicated by the obligor under paragraph (2) either—
...
(i)make appropriate corrections...or
...
(ii)send a written explanation or clarification to the obligor, after having conducted an investigation, setting forth to the extent applicable the reasons why the creditor believes the account of the obligor was correctly shown in the statement and, upon request of the obligor, provide copies of documentary evidence of the obligor’s indebtedness. In the case of a billing error where the obligor alleges that the creditor’s billing statement reflects goods not delivered to the obligor or his designee in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless he determines that such goods were actually delivered, mailed, or otherwise sent to the obligor and provides the obligor with a statement of such determination.
...
(b)Billing error
For the purpose of this section, a “billing error” consists of any of the following:
...
(3)A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction.
...
(e)Effect of noncompliance with requirements by creditor
Any creditor who fails to comply with the requirements of this section or section 1666a of this title forfeits any right to collect from the obligor the amount indicated by the obligor under paragraph (2) of subsection (a) of this section, and any finance charges thereon, except that the amount required to be forfeited under this subsection may not exceed $50.

See also: https://www.consumerfinance.gov/rules-p ... s/1026/13/

3. Transmittal. If a consumer has arranged for periodic statements to be held at the financial institution until called for, the statement is “transmitted” when it is first made available to the consumer.

(e) Procedures if billing error occurred as asserted. If a creditor determines that a billing error occurred as asserted, it shall within the time limits in paragraph (c)(2) of this section:

Official interpretation of 13(e) Procedures If Billing Error Occurred as Asserted
Show
(1) Correct the billing error and credit the consumer's account with any disputed amount and related finance or other charges, as applicable; and

(2) Mail or deliver a correction notice to the consumer.
What OP describes is not a billing error as OP did authorize the transaction and merchant did ship. This should be disputed under VISA chargeback framework as indicated in my prior post.

https://www.consumerfinance.gov/rules-p ... 3-a-Interp
PluckyDucky
Posts: 346
Joined: Tue Jan 15, 2019 7:29 pm

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by PluckyDucky »

seawolf21 wrote: Thu Jan 20, 2022 1:50 pm ...
What OP describes is not a billing error as OP did authorize the transaction and merchant did ship. This should be disputed under VISA chargeback framework as indicated in my prior post.

https://www.consumerfinance.gov/rules-p ... 3-a-Interp
I think it is.

(b)Billing error
For the purpose of this section, a “billing error” consists of any of the following:
...
(3)A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction.

https://www.law.cornell.edu/uscode/text/15/1666

(a) Definition of billing error. For purposes of this section, the term billing error means:

(3) A reflection on or with a periodic statement of an extension of credit for property or services not accepted by the consumer or the consumer's designee, or not delivered to the consumer or the consumer's designee as agreed.

Official interpretation of Paragraph 13(a)(3)
Hide
1. Coverage. i. Section 1026.13(a)(3) covers disputes about goods or services that are “not accepted” or “not delivered * * * as agreed”; for example:

A. The appearance on a periodic statement of a purchase, when the consumer refused to take delivery of goods because they did not comply with the contract.

B. Delivery of property or services different from that agreed upon.

...

ii. Section 1026.13(a)(3) does not apply to a dispute relating to the quality of property or services that the consumer accepts. Whether acceptance occurred is determined by state or other applicable law.

https://www.consumerfinance.gov/rules-p ... 26/13/#a-1
seawolf21
Posts: 1590
Joined: Tue Aug 05, 2014 7:33 am

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by seawolf21 »

PluckyDucky wrote: Thu Jan 20, 2022 1:56 pm
seawolf21 wrote: Thu Jan 20, 2022 1:50 pm ...
What OP describes is not a billing error as OP did authorize the transaction and merchant did ship. This should be disputed under VISA chargeback framework as indicated in my prior post.

https://www.consumerfinance.gov/rules-p ... 3-a-Interp
I think it is.

(b)Billing error
For the purpose of this section, a “billing error” consists of any of the following:
...
(3)A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction.

https://www.law.cornell.edu/uscode/text/15/1666

(a) Definition of billing error. For purposes of this section, the term billing error means:

(3) A reflection on or with a periodic statement of an extension of credit for property or services not accepted by the consumer or the consumer's designee, or not delivered to the consumer or the consumer's designee as agreed.

Official interpretation of Paragraph 13(a)(3)
Hide
1. Coverage. i. Section 1026.13(a)(3) covers disputes about goods or services that are “not accepted” or “not delivered * * * as agreed”; for example:

A. The appearance on a periodic statement of a purchase, when the consumer refused to take delivery of goods because they did not comply with the contract.

B. Delivery of property or services different from that agreed upon.

...

ii. Section 1026.13(a)(3) does not apply to a dispute relating to the quality of property or services that the consumer accepts. Whether acceptance occurred is determined by state or other applicable law.

https://www.consumerfinance.gov/rules-p ... 26/13/#a-1
OP already “accepted” when they took delivery.

Additionally…
Section 1026.13(a)(3) does not apply to a dispute relating to the quality of property or services that the consumer accepts. Whether acceptance occurred is determined by state or other applicable law.
PluckyDucky
Posts: 346
Joined: Tue Jan 15, 2019 7:29 pm

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by PluckyDucky »

seawolf21 wrote: Thu Jan 20, 2022 2:03 pm ...
OP already “accepted” when they took delivery.

Additionally…
Section 1026.13(a)(3) does not apply to a dispute relating to the quality of property or services that the consumer accepts. Whether acceptance occurred is determined by state or other applicable law.
Under most state laws, there is a reasonable time-period to revoke acceptance. OP may still be within that period. Most states have adopted the UCC, so the rules are probably similar nationwide.

For example, in Oklahoma, "(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it."

But even if he does not revoke acceptance, I don't think a plastic fake ring is the same as a real one. Are you saying that a dispute over receiving a plastic ring as opposed to a real one is a dispute over quality and not a dispute over "delivery of property different from that agreed upon"?
seawolf21
Posts: 1590
Joined: Tue Aug 05, 2014 7:33 am

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by seawolf21 »

PluckyDucky wrote: Thu Jan 20, 2022 2:09 pm
seawolf21 wrote: Thu Jan 20, 2022 2:03 pm ...
OP already “accepted” when they took delivery.

Additionally…
Section 1026.13(a)(3) does not apply to a dispute relating to the quality of property or services that the consumer accepts. Whether acceptance occurred is determined by state or other applicable law.
Under most state laws, there is a reasonable time-period to revoke acceptance. OP may still be within that period. Most states have adopted the UCC, so the rules are probably similar nationwide.

For example, in Oklahoma, "(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it."

But even if he does not revoke acceptance, I don't think a plastic fake ring is the same as a real one. Are you saying that a dispute over receiving a plastic ring as opposed to a real one is a dispute over quality and not a dispute over "delivery of property different from that agreed upon"?
I think we are getting too deep into the weeds.

Regulation require issuer to investigate a billing error. The results of which may or may not allow OP to avoid paying this amount.

Issuer is already investigating via the VISA chargeback framework. Issuer is correct in saying OP may have to pay depending on chargeback results.

Issuer is in full compliance of the law in their communications to OP highlighting the possible outcomes.
Topic Author
Weathering
Posts: 795
Joined: Sun Oct 15, 2017 4:20 pm

Re: Credit card disputed charge (fake merchandise). What to do next?

Post by Weathering »

Spoke to credit union today (with spouse). They our claim is still active and that a lot of letters have been going out which may not be entirely correct. They said another letter should be received within days that either corrects the previous letter or provides a better description. Sounds like a change in the status of our claim triggered a letter but that it is expected to proceed and most likely will not result in us being charged.

In case I hadn’t given these details:
Brand is stated as Zales on receipt email. No chance that it is authentic Zales.
Receipt says ruby ring. Ring received has clear “gems.”
Receipt says 10k gold, ring is plastic.
Receipt says “Vera Wang collection.” I don’t think we will end up getting Vera Wang involved for verification :)
Transaction completed through PayPal guest processing (did not use a PayPal account, merchant checkout was PayPal only). This may be involved because I’m not sure if my credit card company, or PayPal, or the merchant will end up taking a loss.
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