another example of the Credit Card industry's deceptive advertising targeting children
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Thursday, June 02, 2005

Tourist Victim of Credit Card Fraud, India

Another Brit Expat defrauded in India.

Well sooner or later I had to get caught out by it :( I am currently in dispute with my credit card company (well not so much them as Textiles Fair Jaipur). When we were India last November we bought a carpet from a shop in Jaipur called Jalmahal Carpets. Now I am not a suspicious person but the longer I stayed in the shop the more uneasy I became. I know now I should go with my gut instincts. When we arrived the proprietor seemed a really nice bloke, showed us around the shop, demonstrated how carpets were made etc. etc. We are used to all this pre-sales blah as we live in Sri Lanka and have seen it many times before. However, when we went upstairs to actually view some carpets he announced it was his birthday and would we like some food and beer? My wife readily accepted but something made me refuse the beer, probably because I knew we were about to end up in a bartering situation, which after 12 months in Sri Lanka, I am still not imparticularly good at. All during the sale he tried to make me have a beer and I did relent but only once I had seen the carpet I wanted and decided how much I was willing to pay. In the end I got about 20-25% off the price of the carpet but experienced barterers say they could have got 40-50% knocked off. But hey, I was happy with the carpet and the price I paid so I've no issues.

I hadn't got enough money to pay cash so I produced the credit card, signed the receipt along with a couple of other documents, which I was told were local government documents (and they looked the part). Now when the proprietor was filling out the receipt he asked what the date was so I immediately assumed the front about his birthday was to put us in a good mood in the hope we would not barter him down and we left. (Had he really forgotten what day his birthday was on). I smiled and assumed that was all part of the bartering experience and we left, carpet in hand and went on to a restaurant.

When we got back from India I checked my credit card statement and I immediately noticed an entry I could not account for. It wasn't for much, 2700 rupees, for a company called Textiles Fair Jaipur but I simply could not match the entry up with any receipts and neither my wife nor myself could recall what it was for. So I rang the credit card company and requested the receipt and the transaction has been marked as in dispute. They sent my mother-in-law a copy of the receipt for us to check the signature, which my father did (We currently live in Sri Lanka and all my post goes to either my father or my mother-in-law in the UK). It matched. However, it was not the orginal receipt but a photocopy. I can guarantee I did not sign for it but I assume that the bogus receipt was placed under one the the documents I signed. Interestingly the transaction of the bogus receipt was 1 minute after the legitimate receipt. i.e. Jalmahal Carpets was 20:02 and Textiles Fair Jaipur was 20:03.

Alarmingly I also came across this thread, http://www.indiamike.com/india/archive/index.php/t-7162.html. Another person had been to the same shop and had one legitimate and one bogus transaction placed against their card using exactly the same two companies. So this appears to be a not uncommon occurrance with this shop.

Needless to say I have no intention of paying the bill. The amount is imaterial. I just don't like to be conned. It will be interesting to see the reaction of my credit card company. I assume I am not liable until the original, pen written receipt is produced but I know nothing about law. You'd assume that once a few people had complained about this the credit card companies would have some sort of agreement where they take the criminal to court and got him locked up ...

Anyway I thought I'd write this blog entry in case anyone else got caught out using this shop and does a search like I did on google. At least they will have two people to back up their claims of being conned.
Original Source

Shandy,

I read these kinds of testimonies all to often where I work. I do chargebacks for JP Morgan Chase credit cards. I would say that you were a victim of merchant fraud.

Some merchants will swipe your card once for the sale, but while they are doing so will swipe your card one more time. It could be a second Point of Sale Device right next to the one for the legitmate purchase.

The good news for your the consumer is that they are protected, however this protection can easily abused. With MasterCard an unauthorized dispute does not begin with a sales draft order unlike with VISA. A customer signs a form or sends in their own signed letter stating that the a specific sale is unauthorized. For MasterCard, the issuer commences an immediate chargeback for reason code 37. For VISA the issuer will order a sales draft if the point sale value is card present or keyed. However if the mail order telephone order (MOTO) indicator is present then an immediate chargeback is typically commence for reason code 75.

In any case the merchant must respond in representment if the merchant wants to keep the money for the sale. In other words the merchant responds to rebuttal the issuer's claim on the their customer's behalf. For MasterCard if the merchant can show that the card was present and there is a signature, a mark or any type of scribble in the signature line, then merchant wins the dispute hands down. That is true even if the signature is not yours. It could say Mickey Mouse or just have squiggly line and the merchant wins. At that point the issuer has no recourse to recover the funds, so what issuers often to do avoid a write off and rebill a customer's account and send the customer a letter with the sales draft enclosed saying, "Hey, this charge is good and we think you ought to pay it."

As a customer at this point you are still protected. Even though the merchant has won the dispute the customer is protected under Reg Z. All the customer has to do is write back the issuer and state that you have reviewed the sales draft, the signature and maintain as you originally did that the sale is unauthorized. Its not your signature.

At that point depending upon how much money we are talking about the bank may just write it off or look for ways to keep from writing it off. For some of you if your dispute just seems to keep dragging and dragging for month after month this is what is taking place. Banks do not like to write off money, however Reg Z says that an issue must write it off, regardless.

What is important to relize that Reg Z will not protect you if you have not requested that your account be closed and a new number issued. This espically true for MasterCard. If there is no account transfer a bank will use that to avoid a write off. The logic is that if it were truly unauthorized and your account number is compromised than why have you not taken the steps to prevent further unauthorized usage?

For VISA once the merchant provides sales draft then the issuer mails it to you with a fraud affadavit. If you sign it you basically stating that this not my charge. Once the issuer recieves the affadavit they will automatically close your account and reissue a new number, commence a chargeback for reason 84 (no signature), reason code 81 (no imprint), or reason code 61 (unauthorized moto). There are many other fraud reason codes however for VISA these are the top three. Like MasterCard, if the card was present and there is a signature, a mark or something present in the signature line then issuer has no chargeback rights and must do a Reg Z write off. Unlike MasterCard, the chargeback is done first, whereas VISA all the relavant data is ascertained first before a chargeback is commenced. For VISA the dispute has to be qualified so to speak.

Thougt you might find these facts interesting.

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