Colin Timothy Gagnon (sacredspud) wrote,
Colin Timothy Gagnon

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As an end-user, you will never have to deal with this

This will not likely interest anyone else, but I'd like to vent, if I may, about Visa. Yes, that Visa. The one that has their name and holographic "flying V" logo all over your credit history.

Visa's great, at least from a consumer standpoint. It can be a powerful tool for building a good credit history and raising your standard of living more quickly than might happen otherwise. Of course, most people get into a little trouble at some point and fail to use good judgment... Quick show of hands, how many of you have ever gotten into fairly serious debt because you misused your Visa card? I suspect most of you not raising your hands get into debt with your MasterCard. Or Discover or American Express Card. Or maybe you just don't engage in rhetorical hand raising.

Visa muscled themselves into the honor of Biggest Electronic Payment Brand by undercutting and outbidding, and then throwing their weight around. It's fairly appalling behavior, unless you're one of their customers, in which case it's fantastic, because your card is accepted everywhere. Every major brand does this. Anybody who doesn't is just not powerful enough, or lacks the aspiration to become a major brand. You already know this.

Anyway, Visa and MasterCard both have well-defined dispute procedures. They provide the regulations and data processing framework for disputes, but they generally don't touch disputes themselves. If the cardholder's bank and the merchant's bank can't reach a consensus as to who is responsible for the money, the case can be sent to Visa or MasterCard for arbitration, which costs the loser a few hundred dollars. I'd guess that most disputes are between $30 and $80, so usually somebody just gives up and writes it off.

If they don't write it off and the case does get filed, the outcome is based ostensibly on the regulations, but is, in fact, a complete crapshoot. MasterCard's arbitration staff will decide against anybody who makes an obvious technical error, but if everybody is in compliance, they seem to rely on gut instinct. Identical cases ruled by different people can have drastically different outcomes. Visa, on the other hand, is a lot more predictable. Is the other bank bigger than yours? Do they give Visa more business than you do? Are they located in a geographical area where Visa doesn't have a big presence yet? If the answer to any of these questions is yes, then you'll probably lose.

And that's really the point of this post. I had two cases with exactly identical circumstances. The other side of the argument, in one case, is a small, community bank in Utah, and the other one is one of the five biggest card-issuers in the United States. Actually, I have their Visa card. Anyway, I needed clarification on one of Visa's regulations, and I sent them an e-mail saying, "hi, I'm working with two cases, here are the facts for each, blah blah blah, if I read the regulations correctly, the merchant failed blah blah blah, should I file these cases?"

And Visa's answer was "yes, absolutely. This is a clear cut situation, and the merchants are absolutely not entitled to that money."

So I filed the cases. And I won the case against the small bank, and I lost the case against the large bank. And then I got into a little argument with Visa, and we've swapped several messages back and forth. Here are the last few messages of the exchange, paraphrased for length and confidentiality:

Visa: You lost the case because you failed to exercise chargeback reason code XX, which was the proper dispute reason.

Me: But chargeback reason code XX is invalid for transactions that match condition ZZZZ, and per the report you've sent me, this transaction matched condition ZZZZ.

Visa: That is correct. Reason code XX would have been invalid for this transaction. You lost because you used reason code XX instead of YY, which would have been the proper dispute reason.

Me: You are giving me contradictory information. YY IS the reason code I used. You're telling me that reason code XX -- invalid in this case -- would have been the proper dispute reason. Additionally, I was told in an email sent by your staff in February that the merchant is not entitled to this money, under the terms of regulation OMGBFD.

Visa: That is correct.

Me: So the ruling doesn't make sense.

Visa: The ruling is final. You are welcome to escalate this ruling to our appeals process if the transaction amount -- which is $14.99 -- meets or exceeds our minimum appeal amount of $5,000. This is the last response you will receive regarding this case.

So anyway, what was my point? Oh yeah, Visa is terrible, and now I have to personally account for the $550 case filing fee. Our client is out $564.99 because Visa gives bad advice. Business as usual, really. I'd stop using their card if my bank would stop rewarding my wreckless spending with gift certificates.
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