Verotel Business Practice - Acceptable?

[RWF]

Good Morning Gents, I need your esteemed opinion on the following matter.


Last Saturday I got an email from Verotel, of which I am an affiliate of a few of their websites, here's an excerpt:

"Your account has been suspended from payment processing through Verotel due to a recent negative invoice.

An examination of your invoices will show the details leading to your negative payment, and these are usually caused by high levels of chargebacks and/or credits."


Well I thought to myself, I am just an affiliate not a paysite, so they must have goofed up. So I wrote them back explaining, and then they send this:

"You receive commissions based upon the volume that you refer for these sites.

If these transactions are subsequently refunded, and not balanced by positive sales in a period, a negative balance occurs."


Then I wrote back again asking for a clarification on what "Suspended Account" means, assuming/thinking/hoping, it just meant that further checks would not be sent until the account is in positive. This is the answer I got:

"Suspended means that you cannot process transactions through Verotel.

Our Risk Management department and I have discussed this, and as your last invoice was larger (in the negative) than your previous 3 positive invoices, we are not willing to reauthorize your account before the negative amount is paid."



There you all have it, and now tell me if this is normal acceptable business practice or not?

Thanks

[XxXotic]

for kicking someone out who's chargebacks are more then his last 3 positive checks?

yes, i'd kick your ass out too, obviously something isn't right if your chargebacks are greater then the amount you've brought in the last 3 periods

[notjoe]

My question, how the hell did you end up owning a processing company money by promoting someone elses paysite?

I smell something fishy and it isnt the girlfriend

[rowan]

Are we talking about small figures that look relatively bad when expressed as a percentage, or did you suddenly get a heap of chargebacks?

notjoe: he owes them money because his payout has gone negative due to the chargebacks, and he can't send any more sales to make up the difference. It does make things more difficult since he can't just send more sales to compensate...

[RWF]

Keep in mind that these Verotel sites I promote are rinky-dinky, meaning not much interest and therefore sales.

I only link to them so my adult link directory, on my site, has a decent number of choices/entries.

I just think it is strange that they won't credit me for any further commission, until I send them a check. As I wrote in the first post, why don't they just hold back a check until my commissions is in the plus? Theoretically I could miss out on a few bucks, no big deal, just a principle.

[RWF]

Yes this is just small figures, that look bad as a percentage.

[hova]

I can understand that they have suspended your account, I would do the same thing if you were costing me money instead of making me money.

[KRL]

Nobody here ever looks at things from the perspective of the processor. Its amazing.

Everyone forgets people aren't paying with cash in these signup transactions.

The processors are in essence fronting you money with the expectation the customers will pay their bill and then also that they won't chargback the transaction and not pay at all.

I'd love to see how many people here would do that deal with strangers.

[notjoe]

Originally posted by rowan
Are we talking about small figures that look relatively bad when expressed as a percentage, or did you suddenly get a heap of chargebacks?

notjoe: he owes them money because his payout has gone negative due to the chargebacks, and he can't send any more sales to make up the difference. It does make things more difficult since he can't just send more sales to compensate...

I doubt we're talking about a small nominal amount of money here...i dont think we're talking about millions either but still..
I could understand maybe a CB coming back to an account you're no longer promoting and being in the RED but come on now, more than 3 months worth of sales wouldnt cover it? ;)

[rowan]

The problem with only sending small amounts of traffic is that your CB ratio can be inaccurate, just like a signup ratio.

You could send 900 hits with no signups, then get 3 signups in the next 100... same with a CB. You may send 50 more sales before your next chargeback, but right now it looks bad. They're just protecting themselves, although with small figures it does sound a bit pigheaded of them.

How much do they say you owe them?

[notjoe]

Originally posted by KRL
Nobody here ever looks at things from the perspective of the processor. Its amazing.

Everyone forgets people aren't paying with cash in these signup transactions.

The processors are in essence fronting you money with the expectation the customers will pay their bill and then also that they won't chargback the transaction and not pay at all.

I'd love to see how many people here would do that deal with strangers.

Im sure that is factored in when they decide to charge 10-15% in processing fees

[Verotel]

Originally posted by notjoe


Im sure that is factored in when they decide to charge 10-15% in processing fees

Factored in? How do you figure? Think of a bank giving someone a loan. They also charge a "fee" typically referred to as an "interest rate". Now if the bank loans you $1,000 and charges you a 10% interest rate for "fronting you the money" and you don't make your payments on the loan at what point does the bank get this "factored in" 10%? Likewise when Verotel receives a chargeback or a refund the processing fee is also credited back to the merchant for that transaction; it would be different if we kept it...like other processing companies do.

Originally posted by KRL
Nobody here ever looks at things from the perspective of the processor. Its amazing.

I agree KRL...it's amazing.

[rowan]

Originally posted by Verotel
Factored in? How do you figure? Think of a bank giving someone a loan. They also charge a "fee" typically referred to as an "interest rate". Now if the bank loans you $1,000 and charges you a 10% interest rate for "fronting you the money" and you don't make your payments on the loan at what point does the bank get this "factored in" 10%? Likewise when Verotel receives a chargeback or a refund the processing fee is also credited back to the merchant for that transaction; it would be different if we kept it...like other processing companies do.

I don't think your interest rate analogy really works, since Verotel is not providing credit... it would be more like a bank charging mortgage insurance, you have to pay (say) 2% of the loan amount as an additional fee. The bank has figured out that a 2% overhead will cover all of their losses from borrowers who default.

Along the same line, part of the 15% that we typically pay third party processors helps to cover processing losses due to fraud and other billing issues.

[Shoplifter]

You are the affiliate that sent the transactions that were charged back. It's not really an issue with the site operator. Lord knows I have been scammed by my affiliates.

If there is a chargeback debit situation over four invoices it sure smells like fraud even if it isn't, or is just a small dollar value. I would probably close the account as well.

Verotel seems to be very twitchy about this as they go through the IPSP process. They are tightening ship and scrub as well.

[psyko514]

Originally posted by rowan


I don't think your interest rate analogy really works, since Verotel is not providing credit... it would be more like a bank charging mortgage insurance, you have to pay (say) 2% of the loan amount as an additional fee. The bank has figured out that a 2% overhead will cover all of their losses from borrowers who default.

Along the same line, part of the 15% that we typically pay third party processors helps to cover processing losses due to fraud and other billing issues.

The analogy works fine. They may not be giving credit, but they're giving something similar to credit.

A surfer signs up for a site. The affiliate gets paid a week later with the hopes that the surfer won't chargeback. If the surfer charges back, they processor ends up in the hole.

Part of the 15% is not meant to offset losses. Losses come from profit. You can never accurately (or even semi-accurately) predict your potential losses.

Merchant fees are typically 1-4% plus a fixed amount per transaction. The processor has to pay those, plus the cost of their employees (programmers, webmaster support, customer support, tech support, etc). They have to pay for their offices, their utilities, their servers, etc. And on top of that, they want to make a profit.

As for this dude, why would they let him send more signups to cover his negative balance? Based on his history, chances are the new signups would bounce, chargeback or refund as well.

[JulianSosa]

I like Verotel but when I used to use the phone option I would see charges for $500+ per surfer in a day.

Obviously this is not going to be paid on. I have not used them recently so I do not know if they have set a time limit to the per minute stuff.

[johnbosh]

Originally posted by XxXotic
for kicking someone out who's chargebacks are more then his last 3 positive checks?

yes, i'd kick your ass out too, obviously something isn't right if your chargebacks are greater then the amount you've brought in the last 3 periods

wow

[Kimmykim]

Originally posted by psyko514
Merchant fees are typically 1-4% plus a fixed amount per transaction. The processor has to pay those, plus the cost of their employees (programmers, webmaster support, customer support, tech support, etc). They have to pay for their offices, their utilities, their servers, etc. And on top of that, they want to make a profit.

psyko, you're a sweetie, but if you can find me a bank that will process high risk for anything nearly as low as 4%, even on volume, I know a few people that would probably be willing to reward you for that information...

The best I've seen lately before the per trans is 5.5

[Paul Markham]

Originally posted by psyko514


As for this dude, why would they let him send more signups to cover his negative balance? Based on his history, chances are the new signups would bounce, chargeback or refund as well.

You just said it for me.

How long is it before a credit card sign up cannot be charged back? Now armed with this knowledge, are you prepared to credit someones negative account, due to charge backes, on future business that might not charge back?

[RWF]

Ok, try and look at this analogy.

1) You get an advance of $500 from your employer
2) The next day you get a letter, telling you that you have been suspended because your account have gone in negative
3) You will now NOT be compensated for ANY work you perform, until you bring your account in positive!

Sheesh, if that happended I would have lawyers lining up from my door step to Timbuktu, eager to take my employer to court. A fiest for Sharks


What Verotel actually have told me, is that until my check clears their bank, mailing, depositing, clearing etc, 3 weeks +/-, they will STEAL any commisions coming from my referrals! And we all know that we never get credited for all referrals anyways, because of cookies for example. Some sites credit you for a sale up to one month, some for a week, some for 24 hours, and some not at all if the surfer don't sign up right there and then. Also some visitors gets an interest in a site, from your promotional material and then just type in the site's URL in his/hers browser without our referrals code.


Anyways, in my humble opinion the above business practice is not only wrong, it is unacceptable, unethical, and out of principle they can go take a hike, I will remove all links to Verotel sites, until they change their lowesome ways, even if we are just talking peanuts here.


Hey, had they written to me differently, example:

Saying that we need a check for XX amount, and off course you will still be credited for any sales until your check clears.

Heck then I would have send a check last Saturday AirMail, because I think it is fair and square that chargebacks, my commision part of it, will be credited my account, absolutely!

Anyways how much control do I really have, as to the quality of traffic I send. I run an honest review site, and only write the brutal truth. One should think such traffic was good? But still you never know, and be unlucky that a few dirtbacks do chargebacks even though they actually jerked of every day they where a member

[Living For Today]

that is absolutely ridiculous. deadset.

[rowan]

If Verotel suspended your affiliate account due to fraud concerns then I doubt they would be silly enough to continue to accept signups from surfers you send... think about it.

[RWF]

TO: charly (Paul)

I reviewed your site a few months back, we emailed several times, and you liked my review. You are also linking to me on your site. Anyways I think, well hope, you appreciate the quality traffic I send.

But like I wrote earlier today, one can never know when a dirtback member(s) will do a chargeback, even though he/she got everything and more than he/she expected!

I am working on a few paysites myself, and plan to post comprehensive content information to all visitors, read potential customers of these sites, information like: Number of pictures, video clips, galleries, models, resolution, update frequency etc.

Also I will have a signup form, where the subscriber needs to check and put he's/her's initials, stating that they read and agree to my announced content.

That form I can then send to a payment processor, should there be a chargeback. Maybe it will make a difference?

Also I read several places that Credit Card companies/payment processors will put the name of a chargeback customer, on a blacklist. Is this true, and if it is, does it work?

[rowan]

I know that a couple of my processors will usually add a card number to an internal blacklist if there is a chargeback. I doubt that they could legally share this information with other companies.

[RWF]

TO: rowan

I think they would terminate my account, if they had fraud suspicions, don?t you?

They "only" suspended it, and will therefore STEAL my commission until I send them a check, and it clears.

[psyko514]

Originally posted by Kimmykim


psyko, you're a sweetie, but if you can find me a bank that will process high risk for anything nearly as low as 4%, even on volume, I know a few people that would probably be willing to reward you for that information...

The best I've seen lately before the per trans is 5.5

yeah, i thought so. i was talking about regular merchant accounts. i have no idea what the rates are for high-risk so i didn't wanna make up a figure.

[RWF]

Adele Stevens aka Stephens official website, stopped using Verotel:

http://www.adele-stevens.com/webmasters.htm

A little snippet from the page"

"March 12th 2004

As of this afternoon processing through Verotel has been suspended.

In addition we have received news that Verotel is suspending reseller accounts for no justification. The standard notices Verotel are issuing are misleading and likely to cause confusion.

In short a lot of innocent webmasters and resellers are being caught up in a problem caused by other webmasters NOT us."


Thanks Adele, you're so sweet Glad to see I'm not the only one disliking Verotel for their business practices.

[RWF]

Here's a link from a webmaster warning other webmasters against using Verotel.

http://www.hahahahahahaha.net/showth...oto=nextnewest

Note that this post is form December 2001, but he claims they stalled his payment.

[sean416]

Originally posted by RWF
Ok, try and look at this analogy.

1) You get an advance of $500 from your employer
2) The next day you get a letter, telling you that you have been suspended because your account have gone in negative
3) You will now NOT be compensated for ANY work you perform, until you bring your account in positive!

Correct me if im wrong, but they said your last three months of sales havent been able to recoup your negative balance.. so in this situation there was no $500 advance. It was a deliquent account for over three months.

If you have a $500 credit card and dont make payments for three months, they'll start taking action.

As I said, correct me if im wrong.

[BVF]

Originally posted by RWF
Bla bla....yakkety smakkety

maybe somebody would give a damn if you were reputable.

[psyko514]

Originally posted by BVF


maybe somebody would give a damn if you were reputable.

exactly.

this dude has come outright and told us all that the majority of his traffic is charging back and asking for refunds, and then he expects us to believe he's the good guy and we should sympathize with him.

[chupacabra]

Originally posted by psyko514



exactly.

this dude has come outright and told us all that the majority of his traffic is charging back and asking for refunds, and then he expects us to believe he's the good guy and we should sympathize with him.

most likely this guy is a prime example of the type who has caused so much wholesale grief in the processor arena already, forgive me if i don't cry for you argentina..

[RWF]

March 17th 2004: Webmaster not paid

http://www.adultwebmasters.co.uk/cha...e=1&post=17329

[psyko514]

Originally posted by RWF
March 17th 2004: Webmaster not paid

http://www.adultwebmasters.co.uk/cha...e=1&post=17329

NEWSFLASH: NO ONE CARES, YOU SCAMMING FUCKBAG.

[Steve]

Originally posted by notjoe
My question, how the hell did you end up owning a processing company money by promoting someone elses paysite?

I smell something fishy and it isnt the girlfriend

reminds me of my old Vivid stats

[RWF]

Sure I'm scamming, running a 100% honest adult review site.

And there's is no chance that it could be Verotel that is scamming, could there?

Feb. 23th 2004: VEROTEL stole your money too ? (Even suggesting Class Action Lawsuit) - http://ynotnews.ynotmasters.com/issu...02/page14.html

March 5th. 2004: Various Verotel complaints - http://chat.amateurmasters.com/chat....d&threadid=343

March 12th 2004: Webmaster suspended - http://www.adultwebmasters.co.uk/cha...d=1&post=17278

March 17th 2004: Webmaster suspended - http://www.adultwebmasters.co.uk/cha...d=1&post=17326


You see psyko514, I am not the only one dissatisfied with the thief Verotel, besides I don't care about people like you posting wasteless junk like you do. Moderators should delete post, that do not participate, but merely flames, waste of space and time.

[psyko514]

If you believe you've been ripped off, prove it and sue.

You won't see any results by scouring the web for people having problems with Verotel and posting the links on GFY.

You're proving nothing to us. Any program or processor, no matter how good it is, will have it's naysayers. You can't please all of the people all of the time.

[RWF]

REPEAT POST TO CORRECT WRONG LINK.


Ops, somehow a wrong link was posted in a previous post from today.



Here's a link from a webmaster warning other webmasters against using Verotel.

WRONG link - http://www.hahahahahahaha.net/showt...goto=nextnewest

RIGHT link - http://www.hahahahahahaha.net/showth...oto=nextnewest

Note that this post is form December 2001, but he claims they stalled his payment.


WHAT THE HECK, IT'S CHANGING WHEN I POST IT

HERE IT IS IN PIECES.

http://www.user
nix.net/
showthread.php?
t=1987&goto=nextnewest

[RWF]

TO: psyko514

I don't claim I have been ripped off, I say that I do not like Verotel's practice of suspending affiliate webmasters, and stealing their commision, until they send a check and it clears.

Affiliates should share their part of the charge back - Yes

Suspension if account goes in negative is fine - Yes

Holding back commisions until check has been received and clears is fine - Yes

Stealing commision until check has been received and clear, now way José - Not acceptable.

[Shoplifter]

We've used Verotel for two years and have not had any issues at all. In fact I credit them helping with some of my more recent successes.

I think they are under sudden and tremendous pressure to conform to an unknown set of rules, and that has led to some of the recent events concerning them.

In your case I would be more worried about finding out why these guys where charging back in the first place. The first time a sponsor reached a CB level that put me in the negative I would have dropped them.

I'm going to re-read this thread but what websites are you an affiliate of?

[RWF]

I have so many links on my site, in my "directory" section, that I do not remember off the top of my head.

Obviously these sites are not the ones I promote the most, and I am not disgruntled because of the money, just the business practice.

And sure nobody here have any real reason to believe me, but do you believe me more or less than British model Adele Stevens? Just read what she says on the page I posted a link to earlier.

[Shoplifter]

Originally posted by RWF
I have so many links on my site, in my "directory" section, that I do not remember off the top of my head.

Ok this is where I don't buy it. How can you not know?

If it happened to me I would be here bitching about how much the sponsors sucked and they should bail me out.

A decent sponsor would...I remember when WSB went down on Triplexcash and they paid me out in full.

[RWF]

Easy now, if you really want to know I can look it up ok?

I have about 400 links in my directory section.

Does is really matter what sites it is?

Geez, looking it up now...

AlexsVids.com, Bendability.com, , BDShowcase.com, CelesteVon.com, MontrealDream.com, and ZoliGirls.com

These were sites that fitted into otherwise rather empty directory categories on my sites, so I used them to fill some blank spaces.

Satisfied?

[psyko514]

Originally posted by RWF
TO: psyko514

I don't claim I have been ripped off, I say that I do not like Verotel's practice of suspending affiliate webmasters, and stealing their commision, until they send a check and it clears.

Affiliates should share their part of the charge back - Yes

Suspension if account goes in negative is fine - Yes

Holding back commisions until check has been received and clears is fine - Yes

Stealing commision until check has been received and clear, now way José - Not acceptable.

Have they said they're stealing/keeping your commissions?
They're taking your commissions to pay off the money you owe them!

And if the directory categories were empty, why not delete them rather than fill them with "rink-dinky" sites with "not much interest"?

[RWF]

1) Read this email I got from them, after I asked them what exactly suspended means.

"Dear webmaster,

Suspended means that you cannot process transactions through Verotel.

Our Risk Management department and I have discussed this, and as your last invoice was larger (in the negative) than your previous 3 positive invoices, we are not willing to reauthorize your account before the negative amount is paid.

Regards,

Sam
Verotel Merchant Services BV "

Now I might read this wrong, but I don't think so, it says that any commision in between now and when my check has been received, they deposit it and it clears, they will steal!!!

And like some of these webmasters on other links I posted, are discussing is hwo much are they (Verotel) actually deducting in my account on a chargeback, some says that they might add a $15.00 fee on top of the full amount, I hope not!

2) I think a few links with my affiliate code look better than a blank space, and some of those sites where actually added to my site by the site owner.

[chupacabra]

Originally posted by RWF
1) Read this email I got from them, after I asked them what exactly suspended means.

"Dear webmaster,

Suspended means that you cannot process transactions through Verotel.

Our Risk Management department and I have discussed this, and as your last invoice was larger (in the negative) than your previous 3 positive invoices, we are not willing to reauthorize your account before the negative amount is paid.

Regards,

Sam
Verotel Merchant Services BV "

Now I might read this wrong, but I don't think so, it says that any commision in between now and when my check has been received, they deposit it and it clears, they will steal!!!

And like some of these webmasters on other links I posted, are discussing is hwo much are they (Verotel) actually deducting in my account on a chargeback, some says that they might add a $15.00 fee on top of the full amount, I hope not!

2) I think a few links with my affiliate code look better than a blank space, and some of those sites where actually added to my site by the site owner.

i've reread the letter you've posted in this thread a few times now, and i don't see where you are getting this notion at all. nowhere in that letter do i see them informing you that they are going to begin stealing from you... where does it say that..?

[psyko514]

First of all, they're saying you cannot process transactions through Verotel. In other words, they're telling you "DON'T SEND US TRAFFIC UNTIL YOU SEND US A CHECK."

If you continue to send them traffic, of course they're not going to pay you. They told you not to send the traffic, doofus.

And yes, chances are you'll have a $15-$25 fine imposed for each chargeback. Verotel gets fined that much for each chargeback, so why should they have to cover it?

As for an "empty space", what I said was take the category out of your directory if it has no listings. For example, if you have a category called "Anal Midget Fisting" with no anal midget fisting sites listed, delete the category! Don't fill it with shit sites where the surfer is getting ripped off!

[chupacabra]

Originally posted by RWF
Now I might read this wrong, but I don't think so, it says that any commision in between now and when my check has been received, they deposit it and it clears, they will steal!!!

thats what i don't get, it doesn't seem to say that at all. if your posting the entire body of the email, then yes, you're wrong. it doesn't even mention anything about 'commissions', it says your account is suspended... that means you won't have any money coming in until you are unsuspended..!

[RWF]

TO: chupacabra

Then read this line again:

"Suspended means that you cannot process transactions through Verotel."

I read that as any sales, and therefore commision coming from visitors off my site, that sign up as a member, is not being counted.

What the heck do you read this as, if not what I do?

[psyko514]

Originally posted by RWF
TO: chupacabra

Then read this line again:

"Suspended means that you cannot process transactions through Verotel."

I read that as any sales, and therefore commision coming from visitors off my site, that sign up as a member, is not being counted.

What the heck do you read this as, if not what I do?

Like I said, it means they don't want you sending sales to them. If you continue sending sales, you're an idiot!

I'll make it nice and clear for you. What they really want to say is "TAKE YOUR SHITTY TRAFFIC, FUCK OFF AND DIE."