Have you had something stolen from you?

If someone used stolen credit card to purchase something using credit card machine and original owner denies?

• using credit card, whose is responsible for the payment? I own small business and have that credit card machine. Customer used a credit card to pay for $250 using my credit card machine and process went through and $250 was trasferred to our business acct. But, later credit card company called us and said the owner of the card denies that he used that card (so, maybe it was stolen by that customer and customer used it to pay $250). Of course, the customer's cell phone is disconnected and not working and can't get in touch with him. Credit card company is investigating and said if it turns out that owner keeps denying he used it, credit card company will tranfer $250 from our acct back to the owner of credit card's acct. So, we will lose $250 because somebody used stolen card. Is that fair? Is it the way it usually work? Did it ever happen to you?

• Answer:

  In most circumstances the merchant is going to eat that cost. It's part of the vendor's responsibility to ensure they are accepting legal payments to the best of their ability, but this may not always be possible. It is unlikely that the credit card company is going to pay for the fraud, and the cardholder certainly will not be responsible. If you've been given contact information for the credit card company, you may be able to contact them, but they will typically do an investigation into all fraudulent charges to verify whether or not the signatures were accurate to the cardholder, etc. If they find the charge appears to be fraudulent, your business will most likely be losing that money. You may be able to insure yourself against future losses of this kind, but I'm not terribly familiar with business insurance, so I can't really tell you how to go about that. You should also review the terms of your contract (if any) with your processing company to determine whether or not you have any recourse in these cases. It's likely that this is/was laid out at some point when you signed on to use your credit card processor.