My email response from Visa. I asked them, Why are you killing digital businesses?
 

Thank you for your message. For specific information or assistance of this
nature, please contact the financial institution with which you have your
merchant account using the address or telephone number on your Visa
statement. Your financial institution can address your inquiry.

You can also order the Chargeback Management Guide for Visa Merchants, by
visiting the merchant section of our website at:

http://usa.visa.com/business/merchan...ack_guide.html


Thank you for writing.

VISA Webmaster

-----Original Message-----
From: Ken Somerby [mailto:[email protected]]
Sent: Wednesday, December 25, 2002 00:35
To: [email protected]
Subject: Why are you killing Digital Companies?


To whom it may concern;

Why are you card companies killing the digital world, yes as in Porn.

If a customer complains or says I did not authorize it, you can't wait to
make us pay him/her back and for those of us who run afilliate programs,
this is very costly and many sites can't make it. It is ugly and unfair
that a bugger can buy a pass and months later make a complaint to you and
you refund their money and it is not as if they can return our products.

I wish you would institute a hell no policy! Such as the digital product
agreement act.
The porn card or visa digi cards could have a no refund disclaimer, unless
absolute proof of fraud or stolen cards were 100% provable.

I am an honest business man in the world of porn and it costs me alot to
refund as I pay my afilliates as well plus my merchant fees and this act of
freely refunded their money is killing many of us in this industry and I am
even considering giving up, nothing worse than finding out you got a
chargeback after nearly six months of service has been rendered.

It is so wrong when someone buys a pass and looks at what they wanted to
see and get their lust fullfilled and then turn around and chargeback, it
just is a rotten shame and if you pioneered new policies to prevent this we
in the Industry would be so happy and you would be the ultimate.

Thank you for your time.
Ken B. Somerby

Download this as a file

does the guide rebill you monthly for updates?

I sure the hell wouldn't buy it to find out and if I did, maybe I would chargeback on it after I read it,,,,,about a year later:glugglug

i think when you deal with mainstream companies you should use the term adult entertainment hehe

Visa doesn't care about porn. The % of their overall business that it makes up is NOT enough for them to give a rats ass if it stays or goes.

Do you think?:( But it is to easy for all digital companies to get chargebacks as there is no tangible goods, the Internet is a digital world who doesn't deserve this.:warning

OH I know they don't care about porn. And they probably don't care much about soft goods online either, since I can't see it being a significant amount of their business, coupled with the fact that it's impossible to 'prove' delivery under their current set of standards.

Visa cares about their users... not the marchants... and the more they get users, the more marchants will have to accept Visa...

By the way... it as nothing to do with the porn business.... with their new "Zero Liability" policy ....
http://www.usa.visa.com/personal/sec...h2_/index.html
Visa is giving a refund to anyone who is asking for it, on or offline...
Unless maybe you had something tangible shipped to you, and you signed something to receive the package...

What they should do is give a refund the first time.... But also, change the credit card... since their credit card number was stolen right...? THat should takes couple of weeks... to receive the new card...

Should discourage some of them....!

I, too, don't think it wins over many people outside the industry to refer to our businesses as porn. And, in fact, I myself don't even think of what I produce as porn, but as content for "adult-oriented websites."

Now, however, if your site is devoted to people fucking goats...

Experience from few days ago:

We paid with Visa Card non-adult order from dvdempire.com (uses pswbilling.com as processor) in the middle of November. This $40 fee was deducted from appropiate account. But dvdempire is telling they got a message from PSWBilling there was some error with card and they did not receive any payment, at 22nd December, 40 days after transaction money still nowhere and dvdempire refuses to fullfill order. What is telling Visa to this situation? Money are at PSWBilling merchant account but we will gladly chargeback them if you give us order. What to do know? Charge back and possibly loose ability to pay with credit cards forever? Or keep $40 for defraudant no matter if it is Visa, PSWBilling or DVD Empire? What would you do on our place?

I have three words for everyone: Verified by Visa.

This Visa Program for the Internet took effect in the EU Region of Visa this past April. It takes effect here in Visa USA April of 2003. Essentially it turns a card not present transaction, which are what all of ours are, into a card present transaction. It is fairly complicated to explain ? pretty simply to use.

A merchant (or in our case an IPSP) has to buy software and hardware that is certified by Visa. This is called a Merchant Plug In. EPOCH has had this installed and certified since August. It is tested and it works.

When a cardholder joins a site, they will be prompted for a pass phrase. This is something the cardholder has to do with his / her issuing bank. It is NOT required, yet, by issuing banks to register their cardholders. It is up to the banks.

IF the cardholder has registered the card with their bank, then a 3 party transaction occurs (cardholder / third party processor / Visa): The session is turned over to an unrelated processor and that processor gets the cardholder pass phrase and verifies it through a system at Visa so that all three of those parties KNOW that it is the registered cardholder using the card for that transaction. IF the transaction is one whereby the cardholder is registered and the pass phrase does not match, then the transaction is declined. If not, then it is completed.

Here are the benefits:
1. It is fast? no balk time.
2. As long as we, the merchant, have the plug in (and we do), we have chargeback protection for the most common reason code ?It wasn?t me.?
3. If the bank is registering and the cardholder has not, too bad for the cardholder ? they eat the transaction ? no chargeback rights for ?it wasn?t me?.
4. It finally makes cardholders responsible for their purchases and a code is added to the transaction which makes it impossible for the Issuing banks to just chargeback transactions because they are marked High Risk and Internet.

There are drawbacks as well:
1. The economic loss is on the Issuing bank ? not us, however the chargeback can still count against our ratios.
2. This is friendly fraud protection only. Webmasters have to make sure proper disclosure is there. A cardholder can?t deny he / she bought the content, but they can say they were billed unfairly or the content was not as promised.
3. This adds costs to IPSP?s like EPOCH. Our rates will not go up when this starts.

Friendly Fraud has cost EPOCH and Webmasters millions over the years. This helps somewhat. Moreover, it shows that someone is listening at Visa and is trying to give the digital world some tools.

It?s not much, but it beats the past.

Chris
CEO EPOCH

PS: The Team at EPOCH will be at InterNeXt 2003 - in force - to answer all of your questions and to unveil an exciting new product. Register for our Press Release of January 6, 2003 at www.epassporte.com and visit us at Booth 204 in Vegas.
Happy New Year GFY?ers!

I would have to agree with this statement, ...The term "Porn" has a negative stigma to it, the term "Aduld Entertainment", is a much better term to use.:2 cents: :2 cents:

Kimmy's right, as usual.

All we can do to fight back is protect our password systems, produce content the customer wants (and can't get anywhere else), and raise the price as the degree of fraud goes up. Pretty soon, the surfer will figure out if he charges back, he'll end up paying more for what he really does want.

Of course, finding some road around the numbnuts at Visa would also be good for business. Digital wampum, anyone?

Chris,
You know I love ya, but verified, unverified, first born children's umbilical cord sent via the internet, you know that Visa doesn't really give a fuck. They don't have to...

I had an interesting conversation with someone at Fays show in November -- and I'm inclined to agree with them -- let Visa pull the plug sooner rather than later -- the business won't go away, people will still be paying for porn. Before there was Visa on the internet people did it, and after it's gone people will do it. Something will take its' place. And no, I don't count on Paypal as a payment method because Visa and MC still control them just as much as they do you guys.

What would *I* personally like to see from processors? More non Visa, non Mastercard, regional type options -- JCB, Eurodebit, Canada's Interact, etc -- I realize that it's costly to put alot of the smaller systems in place, especially when you look at the immediate ROI -- however, for foreign clients it seems to be a great alternative to Visa/Mastercard -- less of an issue with cdc, less of an issue with fraud or scrubbing, and more flexibility for the clients.

And I love you too.... But in a good, healthy way :)

I agree with your point. There are a bunch of "alternative methods" out there, some of which work well.

We are working on a hybrid, to be released at the show. If you give me a Blackjack lesson I may leak it to you. But ONLY you. :winkwink:

C

I agree for the most part. Putting up a site people want to subscribe to and don't feel cheated by is #1. Whenever anyone poses those pages with all the pirated passwords, I see that lots of sites are totally "me-too" with nothing of their own, nothing original, no organizaing "concept," and no reason NOT to go somewhere else.

GloBill allows you to accept a number of European cards that I don't thing iBill, CCBill, and the others offer.

I'm waiting for the industry biggies to get together and form a credit card company, but I also hope they devise a way to keep out the operators who have been getting us in trouble with VISA and MC. And it MUST NOT be named anything like Porn Card. It needs to be named something which, if it fell out of someone's wallet when he pulled his driver's license out, wouldn't embarrass him. Of course, maybe VISA and MC could set up specialized divisions and put out such a card as well.

Wow, you love me, you really really love me! ;-}}}}

Don't split aces into a ten, the odds are 9:5 AGAINST pulling out more from it than by hitting the aces. I'll show you in Vegas...

Aces and Eights; always slipt, I thought. What about the odds of splitting 8's into a 10? s shit hands, right? Now my world is upsidedown!

And yes, it is REAL.

The CC companies have to get together to do something about fraud. Both when the card is used in a shop and over the phone or net.

The technology is there, but is there the will to use it?

They could have produced cards with your photo on years ago and did not.

I think you just forgot to state the worst disadvantage

NO MORE REBILLS!!!!!!!!!!!

Who cares about the couple of chargebacks if we cannot rebill the customer.

Your changes of busting drawing on the pair of 8's is greater than your chances of not at least winning one of the hands and coming up even, additional splits and doubles not included in the odds.

Now show me some secrets baby!

Not true. Rebills stay the same. If the cardhodler was Verified by Visa then the recurring will be as well. But then we get back to giving good, visable, true disclosure, good quality and ever changing content.

I think it is s good thing and that the bottom line, profits and retention of your Members will increase.

I know I will get slammed by saying this... but I think that everyone needs to start thinking about retention times (it was 5 or 6 months, now 2 or so months...) instaed of sign ups that don't or won't convert. The long term players want a Member that joins, stays, does not ask for credit and does not chargeback. That requires good pricing, honest disclosure, great content and a good billing company (like EPOCH or CCBill) that provides good customer service and helful agents that know how to keep money, not credit everyone with a pulse our of fear.

What are your credits and chargebacks in dollars? Subtract those from your sales. At the end of the year that is your adjusted gross. That, imo, is what matters, if you are a paysite owner.

But what do I know....


Kimmy... call me when you are back to things....

C

Sounds like a good plan......Do you work with AVS companies?
Could my programmer write a moduel to run off your billing company? :helpme

reddawg: did you even bother to read the other thread you started concerning this?
http://www.gofuckyourself.com/showth...threadid=96158

read it.

VISA LOSES MONEY ON CHARGEBACKS TOO.


you wanna know where the biggest part of the problem lies? your processor (i know i'm going to get bitched at for this).

at least 75% of chargebacks are from people who don't recognize the transaction on their bill. they sign up at bigfatbitches.com and then see ibillcs.com or paycom on their statement and get all confused. and now, with the new descriptors, it's getting worse.

another 10% comes from people who aren't clear on how to cancel, or their subscription isn't properly cancelled despite confirmation emails/numbers being issued.

Yes, but he is very clear on who we are and says he didn't do it and ain't getting the service and so on and I have written him and tried to help resolve this, but he does not answer my email.:mad:

he's pulling cardholder fraud, and it's nearly impossible to prove.
it's called innocent until proven guilty, it has nothing to do with Visa "killing digital business".
prove that he did in fact sign up and visit the site, and you'll win the chargeback. good luck.

Hahaha, I think you're forgetting something here buddy...

The guys wife who opens up a cc statement and sees a charge to bigfatbitches.com is an instant credit or chargeback. Third party is not the problem here.

Tom, who else does Glo-Bill process for?

On their website they only list "the usual": Visa, Mastercard, checkcards, Discover, Eurocard, JCB, Diners cards and Electronic Checks

Thanks!

That wasn't quite my point. Processors need to make it more evident who the person will be billed by, and they need to provide a clear, easily accesible link to cancel. None of this "Click here to read the Terms and Conditions" and then a checkbox confirming they did.
My members are clear from the get-go who's charging them, what it'll look like on their statement, and they're offered a clear, unhidden link to cancel. That drastically cut my chargeback rate.

As for the descriptors, that confuses people even more. I had a cardholder who was a regular porn site subscriber, so he knew who ccBill was. But he had no idea who "ccBill - Dugmor" was when he signed up for one of the JoinRightNow sites.

Hi All,

Verfied by Visa and Mastercard's solution is viable and Netbilling has been testing as well. However, unless it is required by the issuing banks that their cardholders use it, they won't. Why? Because if a cardholder know they have no liability if they do not use that pin code, they won't. For this to be successful, it must be mandnatory. Also, it won't do squat for rebill or misrepresented content as Chris stated above. This solution is by no means as great as some think it will be.... although I hope it turns out that way.

Be sure to come by booth #401 at Internext

Thank you, Mitch Farber

Again, as KK points out, third party is not the problem. EPOCH sends email confirmations to all subscribers. The Join Form and Approval pages show ?you will be billed by Paycom.net*XXXXXX? The disclosure is there; it?s the wife opening the bill that is the problem. It is the buyer?s remorse. It is the same old shit and it won?t change until Verified by Visa (Mitch I am going to post a reply to yours in a minute) starts. It is the only way to stop the ?It wasn?t me?? reason code or ?friendly fraud?. Or, if a card is used that the buyer?s identity is masked so he / she doesn?t have to worry about being busted by someone else opening the mail. More on that later.

EPOCH is putting together a Greatest Hits CD of calls we have received over the years at our Call Center in LA. We have over 100 Customer Service Reps, 24 / 7 answering calls in 20 languages. We hear things you would not believe as excuses. In my opinion, the best way to fight this kind of thing is to take away the reasons for charging back or asking for credits. That comes back to quality and disclosure.

Chris
CEO EPOCH

Mitch:

Verified by Visa (?V by V?) gives us economic protection against chargebacks starting April 2003 if we are compliant and have installed the Merchant Plug In. We have. At that point, we have to attempt to verify. If we are the only one ?playing? so to speak, of the 3 parties involved (Merchant / Cardholder / Issuing Banks, through their Access Control Server) we still get the protection. Again, if the Merchant is compliant and attempts, the protection is there.

I think that Issuing Banks will require their cardholders to register sooner rather than later for this for 2 important reasons:

1. The Issuer can?t make the Merchant eat the charge if they are not V by V compliant.
2. Issuers can charge cardholders $2 or more per year for the ?service?. Actually they can force feed the charge.

AOL is promoting V by V. Wells Fargo, Chase, BofA, MBNA; all of the big Issuers are starting a push. The last time I checked, 10 million US cardholders were registered, a drop in the bucket, but better than nothing. In the EU this has been working for about 9 months and the Online Merchants are having great success.

So to my understanding the economics will drive Issuers to register, thus dragging cardholders. Then it is up to Merchants to spend the money, certify and use V by V. EPOCH is all over this. We think it will save our Webmasters millions a year.

Again, we also think that the ?It wasn?t me?? friendly fraud will go away for a time and then it will migrate, as the cardholders will likely figure other ways around the requirement to pay. EPOCH is working on a solution for that as well.

Chris
CEO EPOCH

that'll be depressing..

NO! It will be funny as hell. Interesting and educational. The "Feel Good Hit of the Year". :)

EPOCH 4 LIFE

:)

Look, I work as a customer service agent for Visa, so I'm just pulling this shit out of my ass. I agree that there is friendly fraud going on, but it doesn't constitute for the majority of chargebacks.

Do you think people are reading the full page when they sign up for a porn site? Their keen on getting their rocks off, so they rush through the form. Maybe they see a little line that says "'PAYCOM.NET *Whatever' will appear on your cardholder statement", but where is that little line placed? A few lines below the "JOIN" button, and off screen so that they half to scroll past the "JOIN" button. On top of that, the join page URL doesn't even contain Paycom.

So there's a slight chance that the surfer knows he'll be billed by Paycom. If, buy any chance, he has seen that little line, he'll almost certainly forget 1, 2 or 3 months later when he looks at his statement.

When I get someone who calls me and says they don't recognize iBill, ccBill, Paycom, etc., I tell them to visit the website, use the check a charge form, and see what it is for.
The majority (75%) don't call back. I've had several people do it while they talk to me and all I hear is "Oh yeah, I remember that", or "Oh, that must be my husband/daughter/roommate". When they say the latter, I note their account accodringly, and advise them they can't chargeback.
The rest that do call back must send a letter to dispute further. Only about half do.

And for the person who suggested reporting their card as lost, our policy is to do it if their are 3 or more charges they don't recognize. As for the new card taking weeks to get, that's bullshit.
I can get a new card to someone as quick as the same day if they need it, or within two business days.

I think I'm gonna get a VISA with a 10k limit, have my friend go buy me about 5 laptops, and say the card use wasnt authorized.

Anyone need a laptop?

You joke about it, but that's a very easy way to pull fraud. Get a friend to do it with his signature or a made up one and if the merchant doesn't check to see if it matches the card, they'll lose the cash when the report it as fraud.

Two things though. If the merchant has hidden cameras, a warrant will be put out for your friend's arrest.
Also, for a transaction that large, they might ask for some valid ID, and they might also call Visa to make sure the information you're friend gives them corresponds with what Visa has (name, address, etc)