GoFuckYourself.com - Adult Webmaster Forum - View Single Post - Ibill fined $5.85 million dollars by Mastercard

rowan · 04-01-2003, 06:07 PM

I just noticed this, I've emphasised the relevant bits for the goldfish:

We process MasterCard and Visa transactions through First Data. On March 14, 2003, First Data was notified by MasterCard of an estimated assessment with respect to iBill?s noncompliance with MasterCard?s charge-back rules. First Data notified us that MasterCard has reviewed the historical charge-back percentages for InterCept and Old iBill for the period from January 1, 2001 through February 28, 2003 and has determined that those percentages exceeded MasterCard?s limits. On March 31, 2003, First Data notified us that MasterCard had determined the final amount of the assessment to be $5.85 million. Of the $5.85 million, $3.5 million was recorded as an adjustment of the iBill purchase price, $1.9 million was recorded as an expense for the quarter ended December 31, 2002 and $450,000 will be recorded during the first quarter of 2003. As of December 31, 2002, First Data was holding a reserve of approximately $12.0 million of money owned to us to cover our potential liability for merchant processing card activities, including potential charge-back penalties. This $12.0 million amount is included in Other Noncurrent Assets in the balance sheet contained in our consolidated financial statements. The MasterCard fine will be deducted from that amount. We believe that First Data will maintain a reserve of approximately $5.0 million going forward and will refund any excess from the reserve to us. 

Am I reading this right? ibill are paying a fine from webmaster's 10% rolling reserves? Shouldn't this money be held in trust?

04-01-2003, 06:07 PM
rowan Too lazy to set a custom title Join Date: Mar 2002 Location: Australia Posts: 17,393	I just noticed this, I've emphasised the relevant bits for the goldfish: <i>We process MasterCard and Visa transactions through First Data. On March 14, 2003, First Data was notified by MasterCard of an estimated assessment with respect to iBill?s noncompliance with MasterCard?s charge-back rules. First Data notified us that MasterCard has reviewed the historical charge-back percentages for InterCept and Old iBill for the period from January 1, 2001 through February 28, 2003 and has determined that those percentages exceeded MasterCard?s limits. On March 31, 2003, First Data notified us that <font color="#000080"><b>MasterCard had determined the final amount of the assessment to be $5.85 million.</b></font> Of the $5.85 million, $3.5 million was recorded as an adjustment of the iBill purchase price, $1.9 million was recorded as an expense for the quarter ended December 31, 2002 and $450,000 will be recorded during the first quarter of 2003. As of December 31, 2002, <font color="#000080"><b>First Data was holding a reserve of approximately $12.0 million of money owned to us to cover our potential liability for merchant processing card activities, including potential charge-back penalties.</b></font> This $12.0 million amount is included in Other Noncurrent Assets in the balance sheet contained in our consolidated financial statements. <font color="#C00000" size=3><b>The MasterCard fine will be deducted from that amount.</b></font> We believe that First Data will maintain a reserve of approximately $5.0 million going forward and will refund any excess from the reserve to us. </i> Am I reading this right? ibill are paying a fine from webmaster's 10% rolling reserves? Shouldn't this money be held in trust?