WASHINGTON—The Federal Trade Commission and the State of Florida have filed suit against Chargebacks911 for “unfairly thwarting” consumers who were trying to dispute credit card charges through the chargeback process.
In a complaint filed in federal court, the FTC and Florida are alleging that since at least 2016 the “chargeback mitigation” company and its owners, Gary Cardone and Monica Eaton Cardone, have used “multiple unfair techniques” to prevent consumers from successfully winning chargeback disputes.
According to the complaint, Chargebacks911 has regularly sent screenshots on behalf of their clients to credit card companies that supposedly show that consumers had agreed to the disputed charges—often recurring monthly subscription charges. The complaint notes that, in many instances, these screenshots have not actually been from the website where consumers made the disputed purchases and that the company ignored clear warning signs the website screenshots were misleading, the FTC said.
“The complaint also charges that Chargebacks911 used a system called Value Added Promotions (VAP), which allowed the company’s clients to run numerous small-dollar transactions via prepaid debit cards,” the FTC stated. “By doing so, clients could raise their total number of transactions, lowering the percentage of their charges that were disputed by consumers. The percentage of chargebacks a company faces plays a role in the level of scrutiny a company receives from credit card companies; a higher percentage will likely lead to more scrutiny.”
Other Companies Sued
In the complaint, the FTC and Florida note that Chargebacks911 served numerous companies that the FTC has sued for deceiving consumers, including Apex Capital, F9 Advertising, and AH Media. The complaint further states that Chargebacks911 disputed tens of thousands of chargebacks on behalf of each of those companies.
According to the FTC, “There were many instances, according to the complaint, where Chargebacks911 submitted screenshots of websites on behalf of Apex Capital and AH Media where the name of the product on the sites in the screenshots did not even match the brand name of the product for the disputed purchase.”
According to the complaint, Chargebacks911 regularly overlooked other suspicious behaviors from their clients, including when clients used a large number of different merchant accounts to process charges.
Additional Allegations
The FTC and Florida are alleging that Chargebacks911, Gary Cardone, and Monica Eaton Cardone are violating both the FTC Act and the Florida Unfair and Deceptive Trade Practices Act, and are asking the court to stop the defendants’ illegal activities and order monetary relief, including compensation for consumers and civil penalties, the agency said.
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