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jcnlv · 07-19-2003, 09:50 AM

These types of problems are not limited to iBill. It happened to us with a different processor.

We had the same thing happen with Epoch in Jan. of 2000.
Dozens of recurring accounts over a 2-3 day period were affected. Some were charged as many as 8 times!

A Y2k glitch we were told. (failure to update software is what we heard from other sources)

I wish I could tell you that everything ultimately worked out OK for us. But it did not.

At first Epoch told us not to worry - they would take care of it. It took several days and then when they finally did do the refunds to all of the overcharged accounts they refunded TWICE the amount they should have - almost $9,000 too much!

We were using them for "transaction processing only" through our own merchant account. So the double refunds all came out of our merchant account! We contacted our merchant bank and explained the situation. They were helpful and told us that it would be in our best interest to handle this all ourselves. We were now faced with trying to recover incorrectly refunded charges, while doing damage control with all affected members and our merchant bank. We emailed, called, wrote letters, referenced and cross referenced bank records and spent many 18 hour days trying to get everything back in order.

The process dragged on for weeks -- many of the over-refunds were uncollectible, as the credit card accounts had been closed (when they suddenly saw 8 deposits of $29.95 to their accounts), or had insufficient balances to cover the charges.... a collection nightmare. We received daily, 3-4 nasty emails and/or phone calls from our members, many complete with threats about FTC complaints and chargebacks - it seemed many felt they were simply being scammed.

We lost around $1,500 in uncollectable charges for the over-refunds. Epoch did send us a check for around $2500 to cover administrative overtime and the uncollectables. A nice gesture but only a fraction of the ultimate losses this fuck-up would cause.

3 months later our chargebacks for the month hit 3.8% and we lost the merchant account. Even back then we usually were never over 1%.

We had already changed over to Netbilling for transaction processing but now needed a new merchant account -- with a cancelled account looming over us. We did manage to get a letter from the bank that canceled us that said we were canceled because they were discontinuing adult accounts, and Mitch put in a good word for us with some banks and we were able to get back up and running again with a new merchant account.

When all the moves and everything were finished and changeovers done, we had lost over 100 members. We offered long term special rates for all those affected and ultimately recovered many, but the damage was still very bad and gave us a black mark on a otherwise exceptional banking record. All in all it sure cost us several tens of thousand in lost revenue alone.

Luckily for you it is iBill's bank account that is affected first here. I would think they would do everything possible to get things back in order quickly and efficiently. How this affects your standing as a IPSP merchant with the card companies should be a concern and I would get letters from everyone you can stating that it was not your fault.

In any case, you do have your work cut out for you -- it is no fun.

The worst thing about this business is how difficult it is to have control over all of its different aspects. No matter how much effort you put into doing things the "right way", a fuckup out of your control, (hosting, processors, etc.) or in areas where you have limited control (fraud, hackers, incompetent employees, patent claims, etc.) can make much of your hard work in vain.

07-19-2003, 09:50 AM
jcnlv Registered User Join Date: Aug 2002 Location: Las Vegas Posts: 55	These types of problems are not limited to iBill. It happened to us with a different processor. We had the same thing happen with Epoch in Jan. of 2000. Dozens of recurring accounts over a 2-3 day period were affected. Some were charged as many as 8 times! A Y2k glitch we were told. (failure to update software is what we heard from other sources) I wish I could tell you that everything ultimately worked out OK for us. But it did not. At first Epoch told us not to worry - they would take care of it. It took several days and then when they finally did do the refunds to all of the overcharged accounts they refunded TWICE the amount they should have - almost $9,000 too much! We were using them for "transaction processing only" through our own merchant account. So the double refunds all came out of our merchant account! We contacted our merchant bank and explained the situation. They were helpful and told us that it would be in our best interest to handle this all ourselves. We were now faced with trying to recover incorrectly refunded charges, while doing damage control with all affected members and our merchant bank. We emailed, called, wrote letters, referenced and cross referenced bank records and spent many 18 hour days trying to get everything back in order. The process dragged on for weeks -- many of the over-refunds were uncollectible, as the credit card accounts had been closed (when they suddenly saw 8 deposits of $29.95 to their accounts), or had insufficient balances to cover the charges.... a collection nightmare. We received daily, 3-4 nasty emails and/or phone calls from our members, many complete with threats about FTC complaints and chargebacks - it seemed many felt they were simply being scammed. We lost around $1,500 in uncollectable charges for the over-refunds. Epoch did send us a check for around $2500 to cover administrative overtime and the uncollectables. A nice gesture but only a fraction of the ultimate losses this fuck-up would cause. 3 months later our chargebacks for the month hit 3.8% and we lost the merchant account. Even back then we usually were never over 1%. We had already changed over to Netbilling for transaction processing but now needed a new merchant account -- with a cancelled account looming over us. We did manage to get a letter from the bank that canceled us that said we were canceled because they were discontinuing adult accounts, and Mitch put in a good word for us with some banks and we were able to get back up and running again with a new merchant account. When all the moves and everything were finished and changeovers done, we had lost over 100 members. We offered long term special rates for all those affected and ultimately recovered many, but the damage was still very bad and gave us a black mark on a otherwise exceptional banking record. All in all it sure cost us several tens of thousand in lost revenue alone. Luckily for you it is iBill's bank account that is affected first here. I would think they would do everything possible to get things back in order quickly and efficiently. How this affects your standing as a IPSP merchant with the card companies should be a concern and I would get letters from everyone you can stating that it was not your fault. In any case, you do have your work cut out for you -- it is no fun. The worst thing about this business is how difficult it is to have control over all of its different aspects. No matter how much effort you put into doing things the "right way", a fuckup out of your control, (hosting, processors, etc.) or in areas where you have limited control (fraud, hackers, incompetent employees, patent claims, etc.) can make much of your hard work in vain. __________________ SIG TOO BIG! Maximum 120x60 button and no more than 3 text lines of DEFAULT SIZE and COLOR. Unless your sig is for a GFY top banner sponsor, then you may use a 624x80 instead of a 120x60.