Dramatically overcharged by service provider...how to move forward?
July 29, 2015 2:51 PM   Subscribe

We've been overcharged by thousands by a service provider that can't refund the charges immediately, but wants to pay us back over time. We paid via credit card, but doing a chargeback would likely put the provider out of business. What is the right thing to do?

Over the last 2 months, we were charged >10 times for a expensive, recurring monthly service by a service provider (rather than the two times that would have been correct). This adds up to several thousand dollars in excess charges. This was uncovered in the last couple of weeks when the statement arrived. They have admitted their error, but say they don't have the money to issue a refund on the spot. They say the money is gone. The charges were incurred via credit card using Square, and they have since closed their merchant account. They would like to pay us back over the next five months with interest. They are able and willing to provide a correct statement of the charges owed (via services provided) vs the excess paid and have asked us to draw up a repayment agreement that is satisfactory to us.

There are a few issues here. One is that their explanations are lacking. It seems suspiciously like they were using us to cover their bills and hoping we wouldn't notice - there doesn't seem like there's a great explanation for this. There was one major cluster of charges - daily for 4 days in a row, then 2 days in a row the next week. It doesn't seem to us like something that happens by accident. They claim it was just a big Square error. The other big issue is that I don't see how they are magically going to come up with this money if they were thousands short in the last few weeks. They want to pay back about 1/3 almost immediately and the remaining 2/3 over the next 5 months. And the biggest issue at all is that I don't see why this should be my problem, since it was their abuse of my credit card that caused the problem in the first place. I certainly would never have offered them a loan of this much money.

If we initiate a chargeback, it seems like the dispute over the money then becomes between them and Square, and maybe Visa. If they immediately go out of business, that's on them. Am I mistaken in this? Will the credit card company refuse the refund if they're unable to pay the money? Everything I find on chargebacks also indicates that you should first make every attempt to solve the problem with the merchant before disputing the charge with the credit card company.

If we enter into a written agreement with them, do we compromise our ability to dispute the charges with the credit card company? What timelines are involved? Everything I've found online indicates somewhere between 60-120 days to initiate a chargeback - what if they promise the money and it takes longer than that? Their promised payment plan would take us out to about 6 months after the initial charges.

Basically, are we being suckers if we consider accepting a longer timeline for a refund? We've had a relationship with this business for several years and it's one with a fair amount of trust involved, so this is difficult for me to reconcile, as is the idea of immediately putting them out of business. Am I misunderstanding how the chargeback process works? What's the best option for getting back our money with the minimum amount of trouble? Ultimately, what's the right thing to do?
posted by anonymous to Work & Money (69 answers total) 3 users marked this as a favorite
You can dispute a charge via Square very easily. Just as easy as with Paypal.... :-/
posted by Mac-Expert at 2:55 PM on July 29, 2015 [1 favorite]

The right thing for anyone to do is for them to immediately pay you back. If that puts them out of business, then, well, this is still a capitalist economy for a while yet and they should have more reserve cash on hand for situations like this.
posted by cellphone at 2:57 PM on July 29, 2015 [15 favorites]

What if they just gave you X months of free service (plus 2 or 3 to account for interest), where X is the number of times they have charged you?
posted by Rock Steady at 2:58 PM on July 29, 2015

I would just go straight for a chargeback.

If they're so seriously fecked that they needed to rip you off to cover their bills, then you're never getting your money back from them, no matter what piece of paper you have. Going for a chargeback makes it Visa or Square's problem, not yours, and they have much deeper pockets and better lawyers than you do.

Get your money back first, and then consider doing business with them again. If they're still in business, that is.
posted by Solomon at 2:59 PM on July 29, 2015 [125 favorites]

What's the best option for getting back our money with the minimum amount of trouble? Ultimately, what's the right thing to do?

These are the same thing as this kind of behavior is unacceptable in business life. You should solve this through official channels. Ask for the money back immediately, if they won't pay you back immediately, you handle it through your CC company. You'll get your money, and they will have to deal with your CC company. If they go out of business, that's really not on you at all. That's on them, for being deceptive and for…you know…theft.

Buying into them saying "OMFG, we're totally good for it! We'll pay you back, promise!" is a great way to lose your money entirely, and by then, the chargeback won't be an option for you.

This is what you pay your CC company for with your interest payments. Take advantage of it.
posted by furnace.heart at 3:02 PM on July 29, 2015 [45 favorites]

You have already made every reasonable attempt to solve the problem with the merchant and the merchant refuses to refund the full amount of the excess charge. The merchant says they have Reasons but their reasons aren't your problem and you have no responsibility to them. They were stealing your money. If it really were an oversight, they would still have the money to refund you.

This isn't worth any more heartache. You placed your trust in them and they violated the trust.
posted by janey47 at 3:02 PM on July 29, 2015 [19 favorites]

If they can't pay you back immediately, charge it back. They are likely going out of business one way or another if this is such an impossible situation for them to figure out. And if they're happy to pay back the money with interest, they can get a loan from a bank and use that to pay you and pay interest to the bank (but they're probably in terrible financial shape, so the bank won't give them the loan, because they probably can't pay).
posted by mskyle at 3:03 PM on July 29, 2015 [19 favorites]

I would just tell them that unfortunately you can't afford to wait that long for the money, and if they don't refund all the overpayments in full by [at least a week before the chargeback deadline, but whenever you want really, including next week], you'll have to initiate one.

There is no way they're going to actually pay you back, so you need the money from your credit card company. They can enter into whatever kind of repayment agreement they want with the credit card company they are working with.
posted by jeather at 3:03 PM on July 29, 2015 [15 favorites]

If they're having such serious liquidity problems that they're overcharging you to this extent and then can't pay you back immediately, I don't think that they're in a position to pay you back over time either. Another thing to take into consideration is that your ability to do a charge-back is time-sensitive, so if you do elect to be a nice guy and accept their preposterous offer, you'll likely have no good recourse if they're unable to pay you back.

posted by quince at 3:04 PM on July 29, 2015 [17 favorites]

Your credit card likely has a statute of limitations on disputing fraudulent or incorrect charges. If I were feeling generous, I might give the service provider until a week before that ran out to make me whole; I would under no circumstances let that period lapse without being paid back, even if the company was swearing up and down they'd pay me back in 5 months.

I think you're right that if it was an error, there's no reason they'd not have the money to reimburse you immediately. If it's money they shouldn't have had, it makes no sense that they've already spent it.

If I weren't feeling generous, I'd let them know I was initiating a chargeback in a week if they didn't pay me back in full.
posted by iminurmefi at 3:04 PM on July 29, 2015 [1 favorite]

Yep go for the chargeback if you're still in the window for it. It is not your responsibility to be their loan agent - if they do not qualify for a conventional bank loan - from a company that can manage it if they don't pay it back - then they definitely don't qualify for a loan from you.
posted by brainmouse at 3:06 PM on July 29, 2015 [2 favorites]

The whole point of using a credit card is that you're putting the bank's money, not your own money, at risk. By doing it this way, you're now putting your own money at risk. If these are such bad business people that paying an amount they rightfully owe will ruin them -- well, that's a pretty good sign that they should probably rethink their business plan, to put it kindly. Go for the chargeback.
posted by holborne at 3:06 PM on July 29, 2015 [20 favorites]

Chargeback. If they need a loan, they should get one from a bank, not an unwilling customer. If they can't get a legitimate loan, their business is pretty much toast already.
posted by jon1270 at 3:06 PM on July 29, 2015 [7 favorites]

That's a bizarre saga. The right thing to do is recover the money immediately. What sort of service provider this might be is intriguing, but this sounds like a rather personal relationship, and it sounds like you have been so brutally had that you are still coming to terms with this. "We've had a relationship with this business for several years and it's one with a fair amount of trust involved" must make it very painful to have been defrauded like this.

If it puts them out of business, good, because this is not how an ethical business would operate. Presumably if they are happy to try to steal from you, they will swindle anybody that looks like an easy mark.

Surely your business (and whatever other) relationship with them is over at this point no matter what the outcome of this?
posted by kmennie at 3:20 PM on July 29, 2015 [6 favorites]

If someone else they did this to does a chargeback that puts them out of business while they're in the process of repaying you, I can guarantee that you're not getting repaid the rest of the money. Chargeback now.
posted by griphus at 3:21 PM on July 29, 2015 [28 favorites]

Definitely do a chargeback. You discovered the problem, you notified the merchant, and you made an attempt to resolve. As others have said, the merchant's behavior suggests that they may not pay you back as promised. They received thousands of extra dollars in payments in a short amount of time via a Square account that they have supposedly now closed. It's hard to believe that they didn't check their bank balance or Square account at all during this interval, and harder still to believe that that much of an excess of funds wouldn't make them wonder what was going on. Bring this murky business out into the light of day via a chargeback.
posted by Flipping_Hades_Terwilliger at 3:25 PM on July 29, 2015 [1 favorite]

If the service provider can offer you a time-payment plan then they can also offer the credit card company a time-payment plan. They don't need to go out of business. You should do a chargeback now and let the credit card company handle it.
posted by alms at 3:26 PM on July 29, 2015 [5 favorites]

The money is yours; they stole it (possibly by accident if you want to be generous.)

They are already effectively out of business if being in business depends on counting your money among their assets.

What they're asking for is a loan to bail them out of trouble. You have no more obligation to give them a loan than you do to give ANY struggling business a loan. Presumably you would rather do other things with your money, like save it or pay rent or invest in businesses that have better prospect and/or haven't stolen from you. Presumably you also wouldn't want to support a business whose business model involves extorting such loans from customers after stealing from them, because, well, if nothing else it doesn't sound super profitable.
posted by cogitron at 3:28 PM on July 29, 2015 [4 favorites]

Get a chargeback immediately. Part of my job is debt collection for commercial credit and this is the type of situation where I would listen to the spiel and then immediately write off their debt and send them to an external collection agency.

If you wait, you're never getting paid.
posted by Tevin at 3:31 PM on July 29, 2015 [10 favorites]

I have a crystal ball, I don't use it very often, but I whipped it out just for this question. It says that if you don't do a chargeback you're going to have to take them to court, and even when you win, you still won't ever see your money again. Don't let them guilt you into giving them your money. It's your money!
posted by pazazygeek at 3:31 PM on July 29, 2015 [25 favorites]

They've already refused to refund you what they legally owe--and acknowledge they owe--in a timely manner. God no, do not negotiate with them, do not enter into any agreements with them. Yes, entering into a written agreement could mess things up for you with your card issuer--and in court, if it ever came to that. Honestly, would you trust them to honor such an agreement?

They think they should pay you back in installments, why? Because you should feel bad for them for having stolen your money? That's ridiculous.

Chargeback, at the very least. What you're describing here sounds like fraud to me and they're lucky you're not taking legal action.
posted by kapers at 3:32 PM on July 29, 2015 [4 favorites]

The way this works is that when you see an incorrect charge to your credit card, you notify the offending company and ask that they do a charge back to your credit card. If you do not see the charge back on your credit card account within 24 hours, then you notify your credit card company (800 number on back of card). They will then investigate and fix it. Do not contact Square. Square is their chosen merchant service, not yours.

Do not make an agreement for installment repayments. If you do, then you are legally accepting the credit card charge, becoming an unsecured lender to the company and giving up your rights to a charge back dispute.
posted by JackFlash at 3:35 PM on July 29, 2015 [46 favorites]

My advice would be to initiate a chargeback with your credit card company before the five minute edit window on this comment closes, and never spend a single moment feeling bad for any consequence this has for that company's ability to keep operating.
posted by prize bull octorok at 3:39 PM on July 29, 2015 [17 favorites]

This isn't even fraud, it's theft. A chargeback is the only reliable way you are going to get your money back.
posted by w0mbat at 3:39 PM on July 29, 2015 [10 favorites]

Yeah, also wanting to nth what Jack said: contact your credit card company.

Square has nothing to do with fraudulent charge resolution.

Also, start looking for a replacement for this service because they would be going under very soon - with or without you "financing" them.
posted by Tevin at 3:42 PM on July 29, 2015 [5 favorites]

Huh, it seems like the pitchforks have come out on this one. I'm compelled to respond based on a similar experience.

We pay for our CSA delivery annually, which is quite a big annual charge: about $800 for a year's worth of produce. It's less expensive by a fair margin if one pays annually rather than monthly, though most people pay monthly because, well, $800 is a shitload of money. The CSA is a farm, not a megacorp, and their coffers ebb and flow with the seasons outside of CSA purchases. That's why CSA's are popular with farms, it gives them an avenue to have income that isn't seasonal. I grew up on a farm, so this never seemed alien to me.

We got a statement showing that our annual fee had been applied weekly for three weeks running. The farm behind the CSA apologized profusely--they'd told all their members months before that they were transitioning from a paper accounting system to an online/CC-friendly one. The money wasn't gone, but they couldn't pay us back until after the next month of monthly CSA payments arrived. As a kickback for the inconvenience, they said they'd give us extra goods in the next several weeks' CSA boxes. We agreed because we trust them and love their business--we've been to their farm before, multiple times, and met a lot of the folks who work there. Not only did we get repaid on time, but the kickbacks were appreciated (four pounds of walnuts and almonds!) and they addressed the snafu/their culpability in the next newsletter and thanked us for being understanding.

So, no, lines like this aren't accurate for all businesses:

If they're having such serious liquidity problems that they're overcharging you to this extent and then can't pay you back immediately, I don't think that they're in a position to pay you back over time either.

This depends heavily on the trust you have with the company and the type of service provided, clearly, but my goodness it's not cut and dried.
posted by late afternoon dreaming hotel at 3:43 PM on July 29, 2015 [11 favorites]

There may be criminal fraud going on here. It seems entirely likely that they did this on purpose as a way to get a cash infusion to keep their business afloat. Don't negotiate with them, do not trust anything they say, don't even let them know you're doing the chargeback.

The fact that they're being vague with their answers tells you everything you need to know about their trustworthiness. This negotiating they're trying to do with you (and probably other customers, if they're this desperate) is a way for them to avoid any investigations into what happened. If you don't do a chargeback, then there's no reason for Visa or Square to get involved.

Also, if you wait the 60 or 120 days or however long to do the chargeback, aren't you paying interest on that money? Don't you have to make minimum payments while you carry that balance? That's money you'll lose in addition to the thousands these people owe you.
posted by i feel possessed at 3:46 PM on July 29, 2015 [3 favorites]

Agree with all the others - do a charge back, do not do installments. It's mind boggling to me that the company would share their cash flow issues with you. If they made an error then they have to pay it back, immediately. Paying it back over a period of time, WTF? Did they say to you, hello respected customer, we need you to cover our expenses so we would like you to lend us X dollars that we will repay back over Y term with Z interest? Of course not! Because you're a customer, not their freaking bank! And you never even got the chance to say 'of course not!' because they took the money to you contrary to the arrangements you had in place for services provided.

They are really lucky you aren't taking legal action. Their attitude is appalling. Even more so that you had a long relationship with them and a degree of trust. I mean, presumably they didn't decide to fix their cash flow problem by pickpocketing or robbing banks and then negotiating with the victims for repayment over a long period of time - because doing so is illegal! They shouldn't be in business.
posted by kitten magic at 3:48 PM on July 29, 2015 [3 favorites]

This "service provider" dicked you over and tried to steal from you. Do not let them talk you out of a reasonable request to get your money back.

I use Square for all sorts of stuff and love it. I'm sure Square would not want to do business with people trying to commit credit card fraud. I would start by reporting it to Square so they can stop servicing this business and refund your money directly. A dispute of the charge via your bank may end up dinging Square rather than this company, and you want to ding the company, not Square. If you have trouble with Square, then just do the dispute directly with your bank, but I am guessing Square will do everything they can to make things, er, square.

You owe the crooks no favors. Get your money back.

edit: Just noticed you say they closed their Square merchant account. That seems like a huge red flag to me. I would still try to report it to Square and then dispute all the charges. You can also simply call your bank, tell them what happened, and ask what to do. Your bank wants to prevent fraud and keep you happy. As for the "service provider" going out of business, you owe them nothing. The money was never theirs to begin with so it shouldn't be "gone."
posted by AppleTurnover at 3:51 PM on July 29, 2015 [7 favorites]

Agree with everyone else. Report this immediately.

It is not your job to fund this business to the tune of thousands. That's what banks/friends/family/investors are for. If they can't find any of those, it's not your problem.

You will lose the chance to do anything about this legally later, and they can just laugh at you. An agreement to pay you back will likely negate anything the credit card company could have done. Then you can sue them for not following the agreement, and stand in line behind a bunch of creditors willing to spend more money to get their money back first, and who likely have better agreements.

Please do not let yourself get taken advantage of.

Even if this was a genuine mistake on their part, they still spent money that they took erroneously and it's not a mistake YOU should suffer for.

If you have so much money lying around that this isn't a big deal and you're willing to lose the money just to be nice, please contact me. I have a hundred uses for extra funds including favorite charities ;)
posted by cacao at 3:51 PM on July 29, 2015

Say someone found your wallet.

"Oh, hey, yeah, I found your wallet, but can I pay you back over the course of 6 months?"

"What? Why wouldn't you just pay me back right now?"

"Oh, I spent it."

"Spent it? But that money wasn't yours!"

"Yeah, but if I pay it all back to you, I'll have to run from my creditors."

"Okaaay...but what about my creditors? I have bills to pay, too, and that's my money."

"So can you sign this contract that says I can have your money for a little bit longer? Thaaaanks."

Sounds wrong, doesn't it? Well, that's what's going on here. Initiate the chargeback and get your money back sooner than later. It would suck if they declared bankruptcy in the meantime anyway and then you'd be out the rest of your money.
posted by inturnaround at 3:58 PM on July 29, 2015 [14 favorites]

late afternoon dreaming hotel - I get what you're saying but the critical difference is that the farm who mis-billed you 1) took steps to fix the problem immediately 2) supplied you with incentives to make up for their mistakes 3) offered a valid reason FOR the mistake 4) DID NOT TRY TO NEGOTIATE WITH YOU TO KEEP FROM GOING OUT OF BUSINESS.

The issue with your refund was, as described, logistics not feasibility. And drawing the payments out over 120 days? No way. They are either inept with their finances or inept at maintaining good business relationships. Either way, OP owes them nothing.
posted by Tevin at 3:58 PM on July 29, 2015 [20 favorites]

Everything I find on chargebacks also indicates that you should first make every attempt to solve the problem with the merchant before disputing the charge with the credit card company.

You have done way more than what is required in this regard already. Once you notified them of the charges and they acknowledged that they did indeed post those charges, but refused to pay you back in full immediately, you were done. Next step: chargeback.
posted by merejane at 4:13 PM on July 29, 2015 [5 favorites]

Who knows what struggles the business is having. Evil intent is not the first thing that comes to mind. I'd guess it's more a survival struggle that they are having.

Unless you do totally know them, I would do a chargeback, though. Maybe be kind enough to let them know beforehand, so they can then go straight to the cc company and work a payment plan out with them, not you.
posted by Vaike at 4:19 PM on July 29, 2015 [1 favorite]

This business appears to be taking advantage of your several-years-long business relationship with them and trying to manipulate a loan out of you. This comes with a huge set of risks that will assuredly not be worth it for you.

You mention the spaced out, yet clustered manner in how you were charged -- and that the company blamed these excess charges on a big problem with Square (ie: the technology platform). Has Square mentioned anything about this issue on their end? I would imagine an error on their part that resulted in businesses overcharging customers by several thousands of dollars would get quite a lot of attention/media spotlight. This seems especially true when you consider Square is going public and is therefore under heightened scrutiny. Personally, I couldn't find any recent or relevant information/news on other Square customers dealing with multiple duplicate charges.

The fact that the business cannot immediately refund these excess charges is a huge red flag to me too. This means they've spent the money they've stolen from you (ie: money they wouldn't have had otherwise) and have used it to continue to run their business (ie: a business that needed money it didn't have to keep running). This reveals quite a lot -- as if planned and as though they're only backtracking/thinking of excuses because you caught them red-handed. This casts a lot of suspicion on whether they could be trusted to repay you at all -- either via their 'loan' terms or not. After all, if you agree to their terms and the window for a chargeback is allowed to lapse, you'll have no recourse -- you will not have the resources, clout or threat of the CC company behind you. You'd have to do the leg-work and sue them the old fashioned way.

It's also important to remember that interest is accruing on the overcharged balance every day it sits in your CC billing cycle. Who would be responsible for the CC-applied interest that's accruing daily on this enormous balance? Is this the interest they were referring to including in repayment (ie: pay the balance/CC interest; you get nothing for providing the loan)? Or did they mean they'd pay you to supply the loan (ie: underpay you by not paying CC-compounded interest)?

The ambiguity of the business' responses and large sum of money involved in this is concerning. My vote is to immediately initiate a chargeback. The CC company will put a 'freeze'/hold on the disputed funds until the situation is researched. If the results are in your favor (and they will be in a situation like this), the funds will go back into your available credit, the interest/fees pertaining to the funds will be removed, and your involvement ends.

As to how this will impact the business in question -- yes, they'll be responsible for the funds and the CC company will pursue them for it. It's also possible law enforcement will become involved -- several thousands of dollars flagged as potential fraud is kind of a big deal -- especially since they closed their Square account afterwards. I can't imagine they'll survive this -- such is the consequences for poor business management.

But that's not really your problem -- you're the customer, not a board member, not a friend, and certainly not a bank.
posted by stubbehtail at 4:24 PM on July 29, 2015 [3 favorites]

Wow, sign nothing. No payback agreement, no IOU. If they ask again, say you're going to have to run it by your lawyer. Seriously, sign nothing - if they're about to go under, good luck collecting an unsecured IOU in bankruptcy. You know what? Talk to a lawyer. And chargeback. Screw them. For them to plea for your indulgence is blatant emotional manipulation. If they're this shitty at running a business, you might be doing them a favor by shutting them down.
posted by mibo at 4:29 PM on July 29, 2015 [6 favorites]

So a pretty common line is, "Don't loan anyone money unless you're okay with not being paid back," and that's usually intended for family and friends, but this is basically your situation right here. You should immediately do a chargeback unless you are 100% okay with never seeing that money again.

Also, I would never want to do business with a service provider that operated like this, so I think the more ethical choice for not just yourself but everyone else is to do the charge back, especially if it does put them out of business. For all you know, they've done this whole overcharging/can't pay you back trick to a bunch of other customers as well, and you had no idea because it didn't happen to you.

However, even if this is a one time thing, even if this is a honest to goodness mistake (although I agree with other commenters that it is almost certainly been done in bad faith), you should still do the chargeback. You are owed this money, and unless they can immediately pay you back, they have stolen this money from you.
posted by litera scripta manet at 4:31 PM on July 29, 2015 [3 favorites]

Basically, are we being suckers if we consider accepting a longer timeline for a refund?

Yes. None of their story adds up, there is no reasonable explanation for them not being able to refund your money immediately.

What's the best option for getting back our money with the minimum amount of trouble?

Notify the company that "It won't be possible" to make this arrangement and you will require a check delivered to you by noon on Friday. Include the information that you will be unable to continue your professional relationship if said check is not received. If the check does not appear, make the chargeback at 1:00 pm on Friday.

Ultimately, what's the right thing to do?

The right thing to do is live up to your responsibility (and best interest) to protect your own employer from the dishonest people out there trying to take what is not rightfully theirs. Your loyalty to your own employer and your own professional career should be your top priority.
posted by raisingsand at 4:34 PM on July 29, 2015

Before you do a chargeback, try to get the statement from them first. That way you'll have very clear documentation in writing that you were charged in error and that they owe you the money.
posted by zachlipton at 4:35 PM on July 29, 2015 [1 favorite]

...and they have since closed their merchant account.

Also, consider that Square may have closed it for them after receiving other complaints.
posted by jon1270 at 4:44 PM on July 29, 2015 [19 favorites]

I would go straight for a charge back, for several reasons.

One, this is not your problem. If they can't keep their business afloat without keeping your money -- which they stole from you, inadvertently or not -- as a loan from you to them, tough shit.

Two, if you enter an agreement with them, what happens if they can't pay it? Maybe they go bankrupt, and you're one credit in the bankruptcy, and you can't reach their assets. Maybe Visa says, oh, you had a contract with them, so a charge back is no longer appropriate.

Three, yeah, normally you want to negotiate with them first. Not negotiate a payment plan, but tell them of their error and give them an opportunity to fix it. But the thing is, you have already done so. They won't refund your money immediately, because they can't. So, there's no next step, no 24 hour deadline. Often a bank/credit card provider will ask what you've done to fix the problem and insist on it, but that's already done here.
posted by J. Wilson at 5:10 PM on July 29, 2015 [2 favorites]

If you want to have your money back I'd say do a chargeback without further discussion with the company. Call your card directly. I fear that even if there wasn't initially ill will involved they may be in such a tight spot that talking with them will allow them to put the money somewhere where you can't get it.
posted by oneear at 5:15 PM on July 29, 2015

This is insane. If they were behaving honestly and making themselves immediately accountable, like in late afternoon dreaming hotel's story, that is one thing. But they are behaving poorly (what. even. happened) and expecting you to trust them? No no no no no.
posted by easter queen at 5:26 PM on July 29, 2015 [3 favorites]

posted by deadweightloss at 5:43 PM on July 29, 2015

Standard business accounting practices would have prevented them from spending this unless they'd actually earned it. If they can't make good on the vast majority of it today, by cash or certified check--say, at least 90%--then chargeback immediately and find an alternative service provider ASAP. I can't state too strongly that this isn't just fishy, this is HUGE FLASHING WARNING LIGHTS bad. It doesn't matter if it was a Square error, because if they didn't actually have a sale then they shouldn't have been spending the money when it showed up in their account. Which leaves two options: they deliberately spent money that wasn't theirs, or they were already passing bad checks when the deposit showed up. Or, I guess, a third option, that on the financial side their staff is criminally incompetent. And that's before you get into the fishy side of whether the charges might have really been deliberate. Don't just run, flee.
posted by Sequence at 5:56 PM on July 29, 2015 [3 favorites]

Oh god yeah chargeback. I've disputed charges of over $500 and it was resolved very quickly and easily. And in that case it wasn't an error. A company claimed I had entered into a contract with them even though I refused to sign it after reading the fine print. Still was not an issue for me. The credit card company handled everything. I think I might have had to print something out to sign and fax to them. I was very pleasantly surprised how easy it was because I was expecting a huge fight given how nasty the business I was dealing with had been after I refused to sign.
posted by whoaali at 6:24 PM on July 29, 2015 [1 favorite]

Even if you love them, chargeback. It is not your risk to assume.

If the business fails, this error will not be the cause of the failure, but rather a manifestation of larger issues you can't fix. Voluntarily taking on their business risk will not save them.

if you still want to take on the business risk (not recommended), get some return: interest or equity, and be prepared to never get the original capital back or see the return.
posted by girlpublisher at 6:44 PM on July 29, 2015 [2 favorites]

I bet they are going to go out of business over the next few months and they are hoping you agree to this "arrangement" so that they can string you along on the way. Don't go for it. This is what chargebacks are for. Let your credit card company handle this.
posted by joan_holloway at 6:54 PM on July 29, 2015 [1 favorite]

If their merchant account is closed then they're already out of business.
posted by ryanrs at 7:10 PM on July 29, 2015 [7 favorites]

One, they need a merchant account to be able to accept credit cards. Sounds as if they are insolvent.

Two, and this is what I think is of paramount importance, if they did this to you, a long time loyal valued customer, I would bet big money they did this to others too

Charge back.
posted by AugustWest at 7:19 PM on July 29, 2015 [2 favorites]

Also, if they agree to refund the money immediately to avoid a chargeback, insist on getting a certified cheque, because otherwise you're out the money you overpaid plus the cost of a bounced cheque.

In the entirely dissimilar case late afternoon dreaming hotel described, I would have also been okay waiting one month, but all you'd do here is lose the chance to chargeback.
posted by jeather at 7:46 PM on July 29, 2015

Oh my goodness, everybody here is fierce! I have a slightly different way of thinking about this.

It sounds to me like you may have a semi-personal relationship with this service provider. Like maybe it's a hair stylist or massage therapist or cleaning service. Maybe you are friendly.

What you need to decide is whether you are willing to make them a loan, and assume that you may never get your money back. My assumption is no. If that's correct, then chargeback. But you don't need to be angry/emotional about it. Just tell them you need the money returned immediately (you don't need to say why: it doesn't require an explanation), and that you are planning on filing a chargeback through your credit card company "tomorrow." No need to get all worked up about it or feel bad: it's a totally normal thing to do, and maybe it will work out fine between them and the CC company.

If they send you the money immediately, great. If not, go ahead and file the chargeback. But there's no need to harangue them or hate them: just do the normal thing, and get your money back.
posted by Susan PG at 8:27 PM on July 29, 2015

I'd also add that the "payment plan" may mean they file for bankruptcy before they repay you and you lose all hopes of getting that money back. I wouldn't mess around and I'd take action immediately while you can still get your money.
posted by AppleTurnover at 8:53 PM on July 29, 2015

I'm often the first one in these threads to try to slow down the calls for chargebacks, but in your case I think you need to for a few reasons.

First, there's a ~100% chance you'll get your money back if you chargeback. It will be delivered right back to your card, almost guaranteed. Then Square will take the money from the merchant's bank account, or if that fails, try to collect it. But that's their problem. Don't make it yours.

Once the chargeback period has expired, if they won't pay you you'd have to use legal action to get a judgement against them. But if they don't have the money, how will you get it?

Incidentally, it's very likely that Square closed their merchant due to excessive chargebacks. You may not be the only person affected.
posted by reeddavid at 8:57 PM on July 29, 2015 [3 favorites]

But you don't need to be angry/emotional about it

Okay, but the anger isn't exactly misplaced. If this was an honest mistake they would still have the money and be able to return it immediately. By all appearances, they deliberately overcharged and are now trying to placate the OP until the chargeback deadline passes. It's pretty fucked up.
posted by JenMarie at 9:34 PM on July 29, 2015 [5 favorites]

Doing business while insolvent is all kinds of bad, and even if you have an extended personal relationship with this service provider, you don't want to be part of perpetuating that situation.

chargeback++. It's just business.
posted by holgate at 9:53 PM on July 29, 2015 [2 favorites]


You don't believe this was a mistake, by your own account. So, don't allow them to convert their fraud against you into an unsecured loan at your expense and risk. They aren't dealing with you honestly.

If that drives them out of business, they shouldn't be in business. Who will they do this to next?
posted by snuffleupagus at 10:41 PM on July 29, 2015 [1 favorite]

There's one concern that other people haven't addressed. I can't tell if you're a retail or business customer of this service, but if you would have repercussions from not having their service which would make this overcharging look cheap, then possibly it's worth writing it off to give you the extra few weeks or months that the service might last if it doesn't refund you, while you're making alternative arrangements.

And if you do need the service for your own business, then it may be worth thinking about whether you can get any of the providers of that service to provide it to you direct in the future, without going through their incompetent billing. Almost certainly you'll want to make the chargeback though. Just think about keeping communication lines open while you do so.
posted by ambrosen at 12:09 AM on July 30, 2015 [1 favorite]

I also use Square. A few years ago I worked briefly for a shady business that took Square and another wireless type credit card payments. YEP. SHADY BUSINESSES DO THIS, not usually in such high amounts, though. I saw it done.

I also know of no way this could be a Square mistake, based on my familiarity with the service.

Chargeback. Stat. Otherwise, your money is gone gone gone.
posted by jbenben at 2:05 AM on July 30, 2015 [2 favorites]

The only way I could see doing the payment plan this company wants is if the company is owned by your child/very close friend and you are okay with making a gift to them to keep their company afloat. But if that were the case, your child/very close friend would have just asked you for the money rather than stealing it from you.
posted by rainbowbrite at 7:00 AM on July 30, 2015 [1 favorite]

so this is difficult for me to reconcile, as is the idea of immediately putting them out of business.

You are not the one putting them out of business. They've done that to themselves. Chances are you are also not the only one getting hit with fraudulent charges from them. You should do a chargeback. You should not feel guilty. They're the ones that have committed a crime.
posted by asockpuppet at 8:35 AM on July 30, 2015 [1 favorite]

I am a small business owner and am generally reluctant to recommend a charge-back. However, this is exactly the situation charge-backs are made for and you shouldn't feel bad about whatever hardship this causes the company. That is not your problem.
posted by workerant at 10:44 AM on July 30, 2015 [1 favorite]


I'm adding my feedback because I haven't seen the part where this happened over the last two months and that you found out after the statement arrived.

It's clear you don't regularly check the balance on the card. If you didn't notice right after the first "mistake" occurred, it increased the probability that you wouldn't notice the other accidental charges. Who knows? Maybe you even had some sort of autopay setup for less than the full amount and wouldn't bother to check the statements? It's possible. They could get away with it, especially after closing their square account.

Not to mention that unless these charges occurred just before the statement closed, they had plenty of time to notify you that an issue occurred and tried to make it right. They didn't, because they have no intention of making it right.

It's possible that instead of the company, an employee or family member that had access to their bank accounts stole the money, but in that case, unless I had a close relationship the owner and saw criminal charges pressed against the culprit, there's no way I would consider a deal.

Either way, it's their problem and not you job to cover their mistakes. Sucks for them, but business is business and they're clearly not capable of doing their part.
posted by bindr at 3:03 PM on July 30, 2015

The only way that doing anything other than a chargeback makes sense is if a) you trust these guys enough to enter into an alternate payment agreement, and that they're likely to make good on it (which, given that you're asking this question, seems unlikely), or b) you don't care if you ever see your money again. They're running a business, not a charity, and it is ultimately not your problem or your fault that they manage their finances poorly.
posted by Aleyn at 6:54 PM on July 30, 2015

By the way, Square doesn't currently allow subscriptions or recurring payments. Square also prohibits retention of card information by merchants.

In a situation where recurring payments need to be made, the merchant is required by Square to contact the customer each and every time a sale happens to get the card information and to receive authorization to complete the transaction. Were they actually following Square's protocol and contacting you every month to get the card number like they were supposed to?
posted by i feel possessed at 11:02 PM on July 30, 2015 [1 favorite]

In light of I feel possessed's research (Square does not do recurring payments) you should also contact the police and file a report.

Call your credit card company and file a police report. I'm sorry. I know you trusted these people.
posted by jbenben at 7:58 AM on July 31, 2015 [1 favorite]

Can we get an update on this?
posted by standardasparagus at 1:39 PM on July 31, 2015 [5 favorites]

We've had a relationship with this business for several years and it's one with a fair amount of trust involved

Now that they have overcharged you by thousands, there is no longer a reason for you to offer them so much trust.
posted by yohko at 12:06 AM on August 2, 2015 [1 favorite]

They probably didn't close their merchant account. Others may have complained or they did so in a misguided attempt to close this possibility of chargebacks.

The possibility that they've intentionally done this to other customers is nearly 100%.

Hope you started the process and have a good resolution.
posted by barnone at 2:07 AM on August 4, 2015

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