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Table of Contents

Lead Story

International acquiring: opportunities abound, tenacity required


Industry Update

Square pays out $2.8 million in chargebacks

EU disputes MasterCard cross-border fees

Retail gift cards gain

NYPay, Deloitte take on real-time payments

Digging deeper into KYC


Outsmarting cyber predators

The Mobile Buzz: To mobile optimize or not?


The very point of sale: Great idea, but can it scale?

Dale S. Laszig
DSL Direct LLC

EMV and the open floodgates for equipment leasing

James Huber
Global Legal Resources LLP


Street SmartsSM:
Considering a sale of your portfolio - think again

Jeffrey I. Shavitz
Affinity Solutions Inc

Help merchants reduce third-party remote access threats

Gary Glover
Security Metrics

Why your social media marketing is failing

Nancy Drexler
Acquired Marketing

Company Profile

M-S Cash Drawer

Vision Payment Solutions LLC

New Products

No-hassle e-gifting


Secure, simple mobile payment verification

Ping Mobile 2 Credit
Ping Mobile 2 Credit


Take a stayawaycation


Readers Speak

GS Book Notes

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

July 27, 2015  •  Issue 15:07:02

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Square pays out $2.8 million in chargebacks

In June 2015, Creative Creations Omaha owner Patricia Urbanovsky turned herself into local law enforcement after being charged with three felony counts of theft in connection with the sale of worthless travel vouchers. Investigators revealed that three of her former employees accrued $141,000 in personal credit card charges on behalf of Urbanovsky after she exceeded her own credit card limits to run the voucher scheme.

While Creative Creations itself has operated as a legitimate wedding and event planning and rental business, Urbanovsky apparently took a wrong turn when she allegedly created a nonexistent employee at Southwest Airlines to contract with for reduced airfare vouchers, which were subsequently resold to the public.

Starting in March, complaints surfaced that vouchers purchased through Creative Creations had not been funded for redemption. The Better Business Bureau said it received more than 1,500 public complaints involving about $1.3 million.

A number of consumers also disputed the voucher charges when Creative Solutions failed to pay out. San Francisco-based Square Inc. indicated that it had paid out approximately $2.8 million in chargebacks as a result of disputed voucher charges. Square filed a criminal report against Urbanovsky, who is known to have opened an account with Square in October 2014.

Warning signs ignored?

Although businesses like Creative Creations may appear legitimate on the surface, payment processors must continuously monitor merchant activities. According to Monica Eaton-Cardone, co-founder and Chief Operating Officer at Chargebacks911, one way to prevent fraud by merchants who engage in consumer scams is to adopt a two-pronged approach.

The first step is to exercise consistent and thorough due diligence when boarding new merchants. "Before a merchant receives a credit card processing account, not only should their paperwork be validated, but human contact points should also be tested and verified – such as checking the business directory for a matching listing, calling the customer service phone number to test competency and using any website contact form to test the response," Eaton-Cardone noted.

The second step is to monitor the merchant's dispute reasons and chargeback trends, since heightened chargeback activity may signal a problem merchant. Even then, merchant fraud detection is a delicate matter. "Unfortunately, merchants who aim to scam consumers may pass these tests with flying colors," Eaton-Cardone said. "Fortunately however, this is where monitoring chargeback statistics is most valuable."

She advises payment processors to monitor merchants when suspicious activities occur that could signal increased risk is just around the corner. Following are several red flags payment processors should not ignore:

Authorities involved in the Creative Creations case continue their investigation of Urbanovsky, who could face prison time if felony charges brought against her are deemed valid and enforced.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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