I won a dispute on Visa charges to a sleazebag company and now they have sent the debt to collections. Is this legal, or is there some sort of binding arbitration agreement with Visa when allowing them to process your payments? Edit : Incidentally, they are also calling my cell phone which I believe is illegal under the TCPA.
Your debt is with the bank that gave you the Visa card. If the bank says it’s not a valid charge that should be the end of it but there may be some way around that.
What do you mean when you say you won a dispute with them? Did it go to court, or did the company acknowledge that the debt was not vaild, or something else?
Sure, they can send it to the collection agency. That doesn’t make the debt valid. Send the collection agency a letter demanding that they validate the debt. Also put in the letter that they are only to contact you in writing.
Also, you will want to contact your card issuer and let them know the merchant is continuing to attempt to collect the debt. I could be wrong but I believe this would be a breach of the contract between the merchant association, the merchant processor and the merchant.
You won a dispute with the credit card company, but ultimately not the sleazebag company itself. It is absolutely legal for them to still demand payment from you and send the debt to collections.
Your first step is to ask for validation of the debt from the collections agency as Spartacus suggests. Depending on the nature of what your issue with the company is, that may be all that needs to be done as if the collections agency can’t validate the debt, they are required by law to stop trying to collect and remove any derogatory marks from your credit report.
Do you have a cite for that? The Visa merchant agreement seems to suggest otherwise, indicating that the merchant must accept arbitration by Visa in chargeback scenarios. At the very least, a company would be jeopardizing their future as a Visa merchant.
http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf
I agree completely that they are violating their merchant agreement and will be dropped if they receive enough complaints. However they are not in violation of any federal/state laws (including FDCPA) and thus legally allowed to send the bill to collections. Of course if you won your credit card dispute more than likely the debt will not be able to be validated.
I continue to disagree. It seems to me that merchants have entered a form of binding arbitration. Presumably, laws regarding collecting on debts prohibit making collections in bad faith or for which a settlement has already been reached. How exactly do you propose binding arbitration to work if either party is free to ignore the findings of the arbitrator and pursue alternate means of getting money from another party every time they receive a decision they don’t agree with?
I see some of your confusion (and my own as well). An initial chargeback is not an arbitration chargeback. Check out this link. Basically instead of going into an arbitration chargeback (which can have quite hefty fees associated with it), the merchant is trying to get his money back via collections.
I’m having hard time grasping why an issue with one specific method of payment is supposed to invalidate the original debt(if it exists that is).
If you were you use your credit card to make a payment on your mortgage and then dispute the charge and somehow win, does that mean you no longer owe the bank any money?
I think the point is, the initial chargeback / dispute premise was that the services or goods were not provided at all, or not provided as agreed-upon. Therefore, no money is or should be due the vendor.
The best parallel to this in your mortgage scenario would be if the mortgage company took your money, and did not apply it to your loan balance (i.e. didn’t deliver the agreed-upon service). Then you’d contest the charge, saying “look - they took my money and didn’t give me anything for it”.
If the mortgage company did apply the money, then they’d either win the initial dispute, or be able appeal the decision on the grounds that the initial ruling was flawed.
Similarly, it sounds like the OP’s vendor might think they have grounds for appealing the decision through Visa’s arbitration process, but is trying to get around that.
Very interesting link! What I’m wondering though is could the cardholder be responsible for those fees as well? They just say “the losing party”.