gruffy

I'm sure they will gladly settle out of court with you for an undisclosed sum. Problem is we will all still be fucked.

But hey, mad props for throwing their bullshit back in their faces.

Lane

sarcasm always proves points, doesnt it.

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gregtx

hahahahahahahahahahahahahahahahahahahahahahahahaha hahahahahahahahahahahahahahahahahahahahahahahahaha hahahahahahahahahahahahahahahahahahahahahahahahaha hahahahaha=

There are always going to be bad apples.. have you ever looked at your car insurance policy... how much do they charge you for shit you don't need??? its all in teh fine print.. ya just have to read it...

but lets stick to the subject...
this is about anti trust violations... MC bullying b/c they can...

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PattyeCake*

Paycom/Epoch Way to go!


We are 100% behind you on this one!

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ry0t

Go EPOCH It's your birthday!

basschick

kudos for standing up to mastercard! now if only all the processors would get together and do this to visa, who seems to be an all-powerful company whose word we all are forced to live by even though we make them billions of dollars...

andi_germany

That's about time someone tries to stop those monopolists.

Go get em Paycom/Epoch

psyko514

Wow.
This is insane!

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nevermind

Look ... I support Epoch in this ...

But for crying out loud! Can't this industry take responsibility for any of this?

It's the fucking REBILLS people!

Yes, Mastercard is scum. Yes, many surfers are scum too ...

But you inevitably piss off even the best customers with rebills!

I've used every adult processor ... and cancelling is always a pain in the ass!

Why should that burden be put upon the customer. It's wrong!

Sure ... a few sites offer non-recurring ... very few ... but you still have to buy three months of membership for most of them ...

It's a fucking scam ...

And then webmasters bitch and scream when customers get pissed off and chargeback or demand refunds because they forgot to cancel ...

Something the customer shouldn't have to worry about in the first place!

Like Duh ... What did you expect? This was bound to happen sooner or later.

This industry only has itself to blame ... just as much as anything else.

MikeEP

For the sake of argument, i SOMEWHAT agree with 49th 'to a point.'

First off, i believe Mastercards rules are simply insane and i fully give props to Epoch for taking on such a big issue head on. We been with Epoch since they practically started. But i have to say that even though Mastercard is at fault, ......partially, so are we as an industry.

For instance: Have any of you signed up to any big sites lately doing cross sells? For the sake of it, i went to a couple sites that are charging 39.95 (40 bucks basically) and they're cross selling TWO additional sites for another 40 bucks a pop. So, if the surfer doesn't read down, they get popped with 40+40+40 in the end. Ofcourse there's going to be chargebacks. Blame the surfer right? Sure...why not....they didn't read down.

But what really caught my eye is that these check boxes above for the two additional cross sells, are already "PRE-CHECKED."

It's one thing if the surfer opts to check the boxes himself for the extra two $40 cross sells, cause he wants the access to the other two sites.....but let the surfer check the boxes himself. Why risk the chargebacks? It's a model i don't understand.

Then there's the "FreeAvs" business model. Signup for free, but if you don't read the fineprint in the terms and condition, you'll end up with a 75-120 dollar ding on credit card statement that month.

Some will call the two above deceiving, while others don't. Everyone has there own opinion. Very few will voice it.

Now, in NO way am i sticking up for the surfer for not reading the 'fine print' but to be honest, i was pretty suprised that the cross selling check boxes were pre-checked.

Most will argue that's it's not our responsiblity..it's the surfers. But it's this attitude that gets us all into shit in the first place. I agree to a sense that it's not our responsibility if they don't read the fineprint. I didn't make this post in defense for the surfer. But at the same time, i believe it takes the cooperation of all the parties involved to make a profitable business model that everyone can live with....one that will also help take down some heat from our industry.

You just have to ask yourself... if you YOU were Mastercard, what would you do if you saw the above?

Even though Mastercard has gone above an beyond being completely fucked up with unrealistic expectations and foulplay, this sort of thing didn't just happen out of nowhere. Then again, maybe it does with a monopoly like MasterCard. Every issue has a beginning point...who started it? Them or us? I can't even answer that question.


Anyway, just my opinion and my
flame away if you must...

nevermind

I agree. This industry can't police itself. It really has been built upon deceptive business practices which have somehow become sacred cows.

Well ... sacred cows be damned. I wouldn't be surprized if Visa and Mastercard cut us off entirely.

Masturbationman

the only reason that paycom is doing so many cross sells is because thier charebacks are so high they need to stop themselfs from getting shut down!!! Be scared of the what the future holds for paycom!!!

Masturbation Man

EpochCEO

Much thanks for all the support on this board. Some interesting opinions too.

It will be interesting to see this unfold. Let's hope responsible webmasters and reasonable billing solutions help make this industry a better machine.

--Rand

Brad Mitchell

Tricky billing is certainly not helping the situation... but I take my hat off to Paycom for starting the lawsuit that is long overdue. I'd like to see IBill, CCBill and some of the others join in - that would be some serious muscle if everyone was together on that.

Brad

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Masturbationman

Second:

When CVV2 is perfected the credit card companies wont have to put the blame on the webmaster. It will be put on the issuing banks. This is still about 2 years away. All internet buyers will have a private pin like ATM within 2 years. This will solve most problems and charge back issues, but the technogy is new.

Masturbation Man

Kimmykim

And that about sums it up. Quite frankly, all this crying about how bad webmasters are across the board is crap, pure and simple.

Yes, there are bad webmasters. No, there are not enough bad webmasters to warrant the stance that Mastercard has taken against legitimate and compliant IPSPs.

You think slapping some fines down on people is ALL they've done or asked for? If so, I've got a bridge looking for a home...

Mastercard, in this instance, has been as much a perpetrator of fraudulent transactions as any webmaster or surfer has, by not releasing the card numbers to the processors and gateways that could decline these cards, by not notifying the issuing banks so the cards can be replaced, and by then penalizing merchants and issuing banks if these cards are used fraudulently.

All so they don't have egg on their face and an increased cost of doing business, THEY are considered the good guy by some of the non-thinking on this board?

Furthermore the fact that pretty much every complaint about a Mastercard sale to a processor results in an immediate credit -- REGARDLESS of the circumstances -- should make Mastercard happy. But NOOOOOOO, they want to penalize acquirers for doing what they imply needs to be done in order to make the consumers and Mastercard happy...

Quite frankly I would find it very disturbing if some of the Attorneys General were not taking a hard look at Mastercard in the states where this and other suits may originate.

I'd also be surprised if there is not a class action lawsuit going by the end of the week as other people in this industry realize that you cannot make them happy whether you play by their rules or whether you take their ball and go home.

Masturbationman

If all the billing companies get involved we could lose credit cards in general. This is all political so bush can get elected again. He needs the religious groups to back him. If they see him going after the adult industry that means the winning votes he will need.

Masturbation Man

gruffy

Maybe sooner then you think. PayPal decided to cut out adult payments after being threatend with an anti-trust suit, I'm sure its on the list of options.

Masturbationman

Third:

When everyone sees the new Master Card regulations in a month less then 10% of adult webmasters will be using MC. They are worse than Visa.

Masturbation Man

Chris Mallick

Good Board Name!

Maybe if you quick whacking off your brain would function a little better.

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Chris Mallick

Were you in a coma for the last 2 years?

CVV2 has been around for a long time.

the "pin" is called SecureCode for MC and Verified by Visa for, you guessed it... Visa.

Wake up...

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Kimmykim

Um, not sure where you get your information but CVV2 has nothing to do with a pin number. Its the printed number on the back of the card, more specifically the 3 digit number that Mastercard doesn't make one of its huge issuers like Paypal be compliant with for the cards to work... no point in having it there if the card company isn't going to enforce compliance with the system.

The pin number system is called Verified by Visa, it's not 2 years away, it's already in use by some banks like Bank of America. I give VbV about 6 months in actual widespread use before it's dropped from the system, especially when the banks are not disclosing to consumers that by registering their cards with the PIN they are losing their right to charge back online purchases. I'm sure it's in the fine print somewhere, but God forbid the surfer would have to read that fine print to find out according to some here.

How do I know this? I used 1800flowers.com and a B of A Visa and after the purchase I was hit with two pops -- one for a subscription to a magazine with all my info pre-populated into the fields, INCLUDING cc number, and another from B of A, asking me to register my card for 'zero liability' on the internet.

Chris Mallick

Would you please provide us with a copy?
C

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Kimmykim

Paypal did not drop adult because of a lawsuit. I was in San Fran last week for the Paypal Connect conference and the adult topic was specifically mentioned, along with fraud control and other aspects of the business model they use.

If you cannot manage fraud, then you cannot transact in the adult space on the web. Period. Amex got out because of it, a slew of acquiring banks either got out or went under because of it, and anyone else who doesn't understand or have a way to control fraud in the market will be on their way out the door as well.

It's pretty simple.

Interlude

Good job Epoch, make us proud!

Platinum Dave

Under 1% credits and charge backs IS impossible.

I dont see any choice in the matter for paycom but to do something like this. Its nice to have a company stand up for us and fight back but also makes me worried will Master Card just say enough is enough and pull out of the adult industry billing all together?

that would hurt big time since Master Card is close to 50% of all credit cards in the world.

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Platinum Dave

I missed the confrence call since the phone number was not accessable from my area (Toronto)

I would have liked to listen in and participate. Now I have to get the information bit by bit which is so time consuming.

Chris can you have Clay or someone give me a call to give me more details and answer a few questions directly please.

thank you

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Shoplifter

Here is my take on this after reading through some of the filing..

Paycom has no real choice but to fight it in court as a tactical measure to contest some pretty heavy fines and restrictions on their business.

MC looks like they are telling Paycom to restructure their business to the extent that it probably precludes adult high risk transactions. As well that 1.5 million cash fine is pretty stiff. I have no idea about Paycom's financials but it could conceivably push them into a WSB style catchup payout situation which would be the kiss of death.

Possibly as long as the suit is before the courts this can all be delayed.

I am in no way being negative about Paycom here, I hope they get us all a tiny bit of payback. Just my addled take on things.

psyko514

I kinda doubt that...

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Chris Mallick

Sure. Email Clay at [email protected] with your numbers. He will call you in the AM. I bet he has them already

Strange. Another large client dialed in from Toronto. Sorry for that problem.

C

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Chris Mallick
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Chris Mallick

Payments will not be delayed or restructured. The fine money was taken. The "rules" apply to all high risk merchants, so the restructure is for everyone.

Paycom / EPOCH is fighting to stop future fines, etc...

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tony286

I cant believe you can make those statements. Five years ago I worked for a small adult website he had a merchant account and we would fight chargebacks all the time and win. Why do you think all these awful rules happened, fucking the customer. Lets not play dumb, sites that promise the world and give nothing. Boxes checked that if the customer doesnt read he is fucked and its his fault , thats funny. I could go and on and on, people were in for the short term, they cashed out and didnt care about the mess they left. I understand you have a job to protect but please dont insult our intelligence.

Johnnyv

Paycom / Epoch deserves the respect and support of the Industry they are fighting on behalf of. 1% cb's / credits is a joke. Congratulations on your guts and the wisdom to use them for all of us.

You have our support.

jcnlv

Its always something in this business isn't it?

Does this inclusion of returns/credits in the chargeback totals apply to every high-risk MC merchant, or only those that frequently go over 1% with normal chargebacks? Is this a discretionary penalty or automatic and mandatory? Will every high-risk merchant account holder see these penalties anytime they go over the 1%?

I agree that it especially sucks about all that hacked data not being exempted. There is a lot of hacked info available on the net and you will need outstanding fraud control to keep it under control.

I know most of the 3rd party processors offer the ability to block Email domains and suspect countries, but do any offer Email Address verification prior to processing the transaction? Without it, I don't think you can ever keep chargebacks under control. It isn't perfect but in combination with other fraud prevention features it might make the difference needed to comply.

We found that the cause of chargebacks isn't with "recurring billing", it isn't with so called "friendly fraud", it is from taking bad initial transactions. The recurrings on the transactions that never should have gotten by to begin with are what make chargebacks into the business killers. They grow every month. Add all the trickery some of these sites employ, and I am surprised any of the aggregates can survive with out a whole bunch of low-risk transactions somehow being slipped into the mix.

The problem as I see it is that profits have always been the dominant force with the majority of site operators and processors. Neither want to put in place the safeguards or monitoring needed to maintain compliance with the MC/Visa chargeback regs. The fraudulent transactions look too good coming in... it is only when the return as chargebacks that everyone hates them.

I am not surprised that it has taken this long for the cc companies to start getting tough. They have also enjoyed the profits generated not only from card holders paying for transactions they never made, but also from all the fines charged to the merchants once the card holders chargeback.

They must be getting pressured to do something by the present administration.

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nevermind

After reading the lawsuit, a few interesting tidbits:

Mastercard apparently is trying to put Paycom out of business. Mastercard refuses to meet or even discuss these issues with Paycom --- only with their bank.

Apparently Paycom's bank reported a higher chargeback ratio to Mastercard which, Paycom says, was reported in error? Seems like that kicked off a series of never ending fines and penalties.

Mastercard now says Paycom has to host and operate all of the websites that they process for.

This is really interesting to me because when my husband got into the interent biz years ago, there was much debate about whether third party processing was allowed since third party processors were not the actual operating merchants.

Kimmykim

Of course I can make them. I've worked all sides of this business and I understand who does what, both right and wrong... and I know who's done what, both right and wrong. IPSPs are NOT the appropriate target for these hyperbolic rants people make, especially since they stand to lose way more than someone with their own merchant account from these issues - they process millions a day between them all, and have to value the good for the masses over what suits and individual site owner the best.

I can also say that the landscape in high risk processing is SO very different now than it was 5 years ago that there is no comparison. EVERYTHING, from fraud control to verification to compliance is totally different and changes more every day.

I also know that the smaller you are, the less apt you are to have cb's since you don't do the same volume of sales as a big company and that has a tremendous impact on the overall picture.

Kimmykim

Let's do a little simple math here and perhaps it will shine some light for some of you on how this equation works.

The rule is in regard to having a credit ratio higher than your cb ratio and going over the 1% allowable on a combination of the TWO if MC chooses. (Don't get me started on the settlement that Visa and MC just got where they owe about 3.5 BILLION bucks to the plaintiffs, or WHY they might be looking for money anywhere they can find it...)

So you are cruising along, and your chargeback rate is .495... this is slightly under ONE HALF a percent... no problem you think to yourself, I have a shitload of maneuvering room here, I'm way under, my clients are happy, my CREDIT ratio is .525...

Well, guess what? At MC's discretion, you just busted the cap of 1% combined, AND your credits outweigh your chargebacks...

Guess what? Maybe you'll get fined. Maybe you won't.

If you're doing a couple hundred transactions a month you really aren't going to put them into high cotton if they start slapping $100 per credit or cb fines on you, or if they lump sum fine you... the volume isn't there.

But if you do thousands upon thousands of transactions per month, I guess they'd look at it differently now wouldn't they?

**************************************

At the end of the day, my money says that Epoch isn't the only one facing this problem. Just speculation, but as I said, I'd bet on it, if all companies were making public these figures.

joee

Chris is a no-nonsense , real CEO. Paycom/Epoch has been excellent since Dan Steinberg took his thieving hands out of our pockets. Kudos Mr. Mallick.. while Ibill goes under after Bender and Peterson sold out and left a NOTHING company. These are the people that need a kick in the ass. WSB-holding monies and saying there are CB's that do not exist and get charged $30?

For my monies and why http://www.icecoldcash.com converts well, is Paycom and our own merchant accounts through NetBilling. I am sending Ken some processing soon, to see what he has done for the Flynt's!;-))

Get ready for another "sweep" of the dialers also;-)

Beta testers for FREE dating and Free adult dating wanted.. email me.. http://www.privatefriends.com Thanks

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Kimmykim

This was a topic last year, when both MC and Visa required many changes on the part of the what are now called IPSPs, along with registering merchants and sponsoring merchjants and collecting fees etc.

Notice that Mastercard didn't play that game since they can't follow big brother Visa everywhere without landing in court.

Wonder how they calculate what to fine the big IPSPs... based on number of transactions I would guess they are getting a fee somewhere in the neighborhood of what Visa did... only in a different way.

nevermind

I respect your opinion Kimmy. But I can't help but wonder what will happen if you get some judge who joined a porn site and had a terrible billing experience. Let's face it --- there's a good chance of that happening.

We're the adult industry --- not Wal Mart. There's a million horror stories that Mastercard could bring up about the industry's shady billing practices that could easily outweigh any bad things you guys say about Mastercard.

Even if you're right, the adult industry has a bad reputation --- deserved or not. This won't be the same as Wal-Mart taking Visa to court --- that's for sure.

basschick

tony404 and nevermind - a few years ago, i had a shemale paysite. no cross sells, no undisclosed terms, VERY easy to cancel, and exactly like the promo said.

we started having chargebacks. i contacted every single person charging back, and guess what - EVERY one of these guys admitted that they had used their card to access the site. all but one admitted that they charged back to keep their wife/gf/boss from finding out they bought a membership in a shemale site. the other one said he just didn't want to pay.

when i told these guys that what they did was credit card fraud, almost every one sent me a check for his membership fees plus the money to cover the ccbill chargeback fees.

if visa/mastercard etc really want to stop chargebacks, they'll have every bank tell each customer that it is fraud to chargeback if what they claim isn't true, and can be punishable by fines or even jail. i bet we'd see a lot less chargebacks. sure, the adult industry does a lot of sales crap - but so does my insurance company and the l.a. times.

dig420

good work Paycom, stick it to em

nevermind

Yeah. But Mastercard isn't threatening to cut them off.

Let's face it ... Mastercard is practically the equivalent of God. If they cut us off ... we're dead.

Ibill has been hit with the same fines recently --- and they're already in financial trouble. PayPal bailed all together, but at least they have Ebay.

Because we're in adult, the industry should have kept things cleaner actually because we're always under scrutiny.

Do you really think a judge is going to sympathize with us and care about our arguments?

I doubt it.

Probono

I could stand on a soap box and condemn the recurring billing, the cross billing , the SPAMing and all the other obvious problems with some people in this business. I could find a new soap box and do the same thing for any business type. There are thieves and frauds in every business model and some of them belong in jail.

This move by Mastercard is designed to either shut down this business or just to bleed it to death slowly. They will not discriminate between the honest and the dishonest. We all sink or swim together.

if you earn money in this business or any other business that takes money online for an intangible service you need to get behind Paycom, because if they lose you will need to find a new line of work.

Kimmykim

Notice the request for a jury trial for starters

You find me 12 people that can sit on a jury and have either never had a problem with a cc company or never charged back a porn membership because their wife found out and I'd say you were on Mars ;)

Yes, we are the adult industry, but you know what? It's in Wal-Mart, Home Depot and Mom 'n' Pop Business owners best interest that this case goes to trial... which it wont. Established precedent on discrimation and unfair trade practices like this help merchants, not hurt them.

This is not about adult industry billing practices, this is about specific things that Mastercard has done to a compliant merchant. If Mastercard would like to bitch about the way we do business then they'd be well off to go ahead and file a counter suit now.

Bottom line is that MC or Visa going thru discovery is like you or me giving birth to a 12 pound baby. It doesn't feel good and if there's anything surgically to be done to make it happen faster and with less pain, we'll do it.

Including settling.

Chris Mallick

This is why I love KK. She is smart, to the point and she just ?gets it?. In my opinion, she is one of the smartest people in this business and I am proud to have her associated with ePassporte and to call her a friend.

Thanks KK.

C

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tony286

I said nothing about IPSP's , I said webmasters. Didnt you even take the time to read what I wrote before you started writing back ?

Chris Mallick

Here are my thoughts on that subject:

(Insert Rant Here)

WTF is the difference? The law is the law. If your house gets robbed, the police come, you file a complaint and the judicial / enforcement bodies take over on your behalf. The same is true if your dildo shop is robbed. ?They? may not be as interested in your loss of dildos from your shop as they are in your blender from your house, but you are entitled to due process - regardless.

In business, it is the courts system. Wal-Mart sells Playboy, condoms, whatever. This is business and there are laws. The judges are surprisingly disinterested in our business or our client?s. In Paycom?s opinion, MasterCard violated a number of laws and continues to put our BUSINESS at risk. So we sued the shit out of them. The courts have already decided MC is a monopoly, so there is no fight there. They have to go into court and explain how it is they calculated our fines and how a chargeback from a porn site is more expensive than a chargeback from Amazon. Why is a credit a bad thing again? The list goes on of these and other unanswerable questions by the Defendant (I love that term) MasterCard.

So, my opinion is that it will not make any difference. This industry can?t and should not hide. Fuck that. If anyone is ?afraid? of what people, courts, judges, whomever think, then get out. If you are feeding your family, employing people, not robbing, shaving, scamming, spamming or deceiving consumers, stay in, get involved and say ?No Fucking More?!

But that?s just my opinion, I could be wrong. (I don?t think I am.)

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tony286

Bravo Chris, you are very right

Yo Adrian

That's exactly what I though when I read the post....yes in society we are often looked down upon due to misconceptions of our business....but in a court of law this won't become a factor in deciding the case.

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