Worldpay credit card

Danilady

Dear all,
I need your advice please.

I started a new business (limited liability company) which sells bridal gowns using the internet and through bridal fairs. I accepted credit card payments from customers using a service provider called ‘Worldpay’. I hired sales staff to visit bridal fairs and sell to customers. Once the customer pays by credit card, after about 3 days, Worldpay deposits the money into my business bank account. One day after such an occurrence, someone from Worldpay calls and says the most recent credit card transaction is fraudulent as the card holder says he never purchased the item. So Worldpay now needs me to pay them that money. I inquired from my sales staff about that credit card transaction and they expressed that had no knowledge it was fraudulent especially considering the details given by the customer were correct. So I asked Worldpay, if it was fraudulent, why did they release it and send it to my bank account. Their response was that they failed to identify that on the first instance. They claim the real card holder has expressed that he never purchased the item. So Worldpay is now sending me letters saying I have to settle that amount. I can’t settle because I have already used that money to pay commission for the sales staff and to my suppliers.

I would have thought this is Worldpay’s fault. They should have verified the transaction properly and not released the money to my business bank account. Do you agree? And secondly, if my business hasn’t got the money to settle Worldpay, what should I do?

Thank you for your advice.

Kind Regards,
Danielle

molerat

Was the transaction chip and pin ?
Was the transaction authorised by Worldpay at the time ?

If the answers to both questions is yes then I believe the card issuer is liable for the fraud and not the retailer.

From the UK Card Association http://www.theukcardsassociation.org.uk/cards-transactions/card-present-transactions.asp#content_1306

In addition, when merchants accepts a chip & PIN transactions that have been correctly processed, as advised by their acquirer using a compliant chip & PIN terminal, a merchant may benefit from a liability shift should a chargeback be raised because the card is lost or stolen.

Danilady

Dear Molerat,

Thanks for the response.

It wasn't chip and pin. It was using the web portal provided by Worldpay where we can enter the card holder's details such as card number, address, payment amount etc and take payments. Once we fill the details and submit it to Worldpay, they process it and authorise it. And after about 3 or 4 days, Worldpay deposits the money in our bank account.

Surely considering we used Worldpay's payment system to enter the card details and they authorized the transaction, this is their fault?

Thanks,
Danielle

molerat

I feel you have used the incorrect model for your business and have opened yourself up to fraud. Did you discuss what you intended doing when setting up your account ? The web portal is designed for on line / remote sales with delivery to the customer, chip and pin card machines are for face to face take away sales. Both offer protection if used as designed.

http://www.worldpay.com/uk/sme/online

Start accepting card payments online

Use Worldpay Online Payments, Virtual Terminal or Pay by Link to provide your customers with fast and simple ways to pay. Accept all major credit and debit cards as well as PayPal through your website.

http://www.worldpay.com/uk/sme/face-face/card-machines

We can offer you fast, secure and reliable card machines to fit your business. Whether you're at the till, on the shop floor or on the move visiting customers, we make it simple to start accepting card payments. We offer simplified pricing plans with our card machines to suit your business needs.

Shakin_Steve

Good post, molerat, I think you have explained that perfectly.

Ben8282

Paying commission to your sales staff on cancelled orders is a big no no. It can encourage fraud on their part. The order has been cancelled; the commission has to be reclaimed from your staff.
I assume that the goods have not yet been dispatched. Cancel the order with your suppliers.
How do you KNOW that the details given by the customer were correct? If the details were correct as you claim, and you have proof of delivery to the address given, you could try defending the dispute on this basis.
Also the way this has happened is strange. Normally they would not have telephoned you and told you the transaction was fraudulent in the first instance. You would have received a letter advising you that the transaction had been disputed and stating the reasons for the dispute and been given the opportunity to respond, normally within 28 days.

Danilady

Hi,
Thanks for the information. Please see points below:

@Molerat: In terms of using the Worldpay web portal, the Worldpay salesman didn't give any advice. Simply gave us this facility on a same day basis without much discussions or advice. I did mention to him that we plan to sell at exhibitions and he said the web portal is fine to use.

@Ben8282: The sales commission and supplier amounts were only paid after the money appeared in the bank since I thought the sale was fine and the transaction was completed. Only after a few days of the money appearing in the bank, did Worldpay call and say it is fraudulent! The sales person had given the bridal gown at the fair to the buyer. Worldpay said that the credit card details were correct but the card holder has claimed no involvement in the purchase. I have no way of proving if the card holder was actually buying or not!

This bridal gown sold was £12k so my business cannot pay this. I only wish Worldpay informed me prior to me paying the sales staff and suppliers. If the business has no funds to pay, what can Worldpay do?

Ben8282

This is another of those posts which is really starting to defy credibility.
You sent your sales person off to fair with a £12,000 wedding dress. Surely, that in itself is unusual. You take photos, samples etc to a fair ... not a whole range of stock in different sizes at £12,000 per-item. Somebody then just decided to buy this dress which just happened to be the right size for them so they didn't need any fittings or alterations etc and then took it away with them. This cannot surely be a common occurrence. This very high value transaction was then processed by your salesperson as a cardholder not present transaction without any checks. Your sales staff did not even think to obtain a signature, check ID etc for this high value and somewhat unusual transaction. The sales person in question has now got their commission.
As the dress was already in your possession and taken to the fair (I hope it was insured!), have you not already paid for it?
Worldpay also appear not to have followed established dispute procedures in this case.
I think there is very little that you can do to defend this but, as you say that you know that the details given by the customer were correct, and as these details presumably include a name and address, you could perhaps try reporting them to the police for theft or start civil legal proceedings. I think that if you go to the police and tell them that Mr Smith who lives at 100 High St came and bought a wedding dress from you at a fair using somebody else's credit card and made off with the £12,000 dress, they will investigate.

Danilady

Thank you Ben8282

I am a dress designer by profession so I didn't have any experience with the controls of a business. I trusted my sales person and didn't think anything could go wrong. And I had no prior knowledge of the different types of credit card transactions (card holder not present transaction, chip and pin transaction etc).

I will take the name and address of the buyer and go to the police like you've advised. Thanks again.

robber2

Danilady wrote: »

Thank you Ben8282

I am a dress designer by profession so I didn't have any experience with the controls of a business. I trusted my sales person and didn't think anything could go wrong. And I had no prior knowledge of the different types of credit card transactions (card holder not present transaction, chip and pin transaction etc).
n.

Sadly, its a hard lesson to learn but as a Director it is your legal duty to ensure ALL aspects of the business are run responsibly. You really need to either do your own research / homework or hire in someone with the relevant experience to help you out.

Rob

Danilady

Yes Rob, hard lesson. I was too focused on designing beautiful dresses which customers will like. I didn't look at the other aspects of a business.