Originally Posted by bandboy
I need some information on how creditcard companies work out chargebacks or for that matter paypal also?
Do they temporarily lock your accounts untill chargeback issue is settled or solved?
Also, do they levy some penalty or fee on merchant if a chargeback were to occur?
Well this is a matter which most of us, who host others will come by upon. If your getting into the hosting biz, just ALWAYS double check the orders. Better yet, CALL the customer to verify that it IS in fact the same person. Usually a chargeback = YOU lose money.
I remember a person who sold dedicated servers, he got the order, CC was checked okay. A week later he gets a CHARGEBACK note on his account and found out it was a FRAUD order. So now.. he had to pay for the dedicated server...
As for paypal, I believe they do lock your account till the matter is sorted out. usually by needing drivers licence etc.. faxed to them, so they can verify that it is you.
I believe.. "most" not all, do have a penalty fee if a chargeback is placed. That's why I suggest you always check the IP's, location and better yet, CALL them. Yeah it will cost a bit for long distance, but hey! it saves you the stress
All the best.