Tenacity Pays Off Massively in the End

Case Study: Tenacity Pays Off Massively in the End

This case involved the following MyChargeBack services: preparation of a chargeback request, a bank wire recall, legal demand letters, and appeals to bank and government ombudsmen. 

The Basis for the Dispute

M.C. is a gentleman residing in the United Kingdom. All the way back in 2016 he got involved in an online investment program that turned out to be unregulated and unethical. Over the course of almost a year, he ended up depositing with them £85,000 using his credit card, as well as a further £140,000 by bank wire, for a total of £225,000. This tremendous sum was never truly invested by the broker; rather, the money was simply stolen while fictitious trades were made.

The trades were intended to achieve two goals for the broker. First, to appear to make the investment grow and succeed, causing M.C. to become excited and overconfident, leading to ever more deposits. Second, after the broker estimated that there was no money left to squeeze out of their customer, to make the investment appear to fail in order to discourage any withdrawal attempts.

The broker claimed to be a legal entity located in Bulgaria, but the payments were made to a bank account in Hong Kong.

Having lost a veritable fortune and with no way to recover it on his own, M.C. contacted MyChargeBack for help. However, he only contacted us a full year after his most recent deposit, and two years after his first.

Strategies and Tactics

Our first task, as always, was to gather evidence in support of our client’s claims. In this case, that involved having M.C. send us:

  • credit card statements
  • bank wire verifications
  • contracts and other communications with the broker/merchant
  • screenshots of critical portions of his online account with the merchant

In addition, we did our own research in order to uncover:

  • proof of the broker/merchant’s unregulated status, rendering it ineligible to sell regulated financial instruments in the UK (or possibly anywhere else for that matter)
  • proof that the broker/merchant falsely claimed the ability to offer the services our client thought he was buying
  • warnings by various countries’ financial regulators about the merchant’s unethical business practices

Having all the pertinent evidence in our hands, it was time to compile it all in the clearest and most concise way possible into a single document to file with our client’s bank.

Conciseness is actually extremely important. We have learned that trying to bury a bank dispute department with a pile of paperwork with a ‘the more the better’ attitude actually works against their customer’s interests. Contrary to the expectation that maximum documentation will give the bank more reason to agree with you, in fact it causes fatigue and strain, often leading to either a dismissive or hostile attitude towards the complainant. It may not be fair, but that is how it works, and MyChargeBack’s best practices, worked out over years of experience, bear this fact out.

We began with a chargeback case for the £85,000 in credit card transactions. This is because the timeline for those is much tighter than for bank wires. Unfortunately, M.C. had waited so long to contact us that £10,000 were unrecoverable due to the transactions being too old to dispute. So the best case scenario was to recover £75,000.

We guided M.C. in filing the necessary paperwork that we had prepared and formally requesting a chargeback. Within a few days he received a response from his bank saying that they were raising a £65,000 dispute, but inexplicably not the remaining £10,000. A less experienced or tenacious claimant may have left well enough alone, but MyChargeBack has been down this road enough times. The bank’s decision was not only unacceptable; it was specious and unjustifiable. We demanded and received their agreement to raise the entire £75,000.

Within a few weeks the merchant had responded to the dispute with an unusual offer. Typically they either contest the entire chargeback or else give up entirely. In this case, however, they agreed to concede £55,000, but would not budge on the remaining £20,000. Our client’s bank agreed to this offer, and no amount of arguing would move them. Seeing a delicate situation wherein further arguing could cause bad blood, we advised our client to accept the £55,000, which he did.

The next phase of the operation was to initiate a bank wire recall for the £140,000 of transactions. We assisted M.C. in filing the necessary paperwork to get the process underway, and initially his bank was quite responsive, raising the recall request to the beneficiary bank in Hong Kong.

The serious problems began when the merchant and its bank disputed the recall. Our client’s UK bank simply gave up at that point, apologetically refusing to do any more for their customer. This is a situation that we have been in countless times and had fully prepared for, our client’s frustration and pessimism notwithstanding. We assured him that this was not an unexpected turn of events, and we would stay at his side to continue the process.

The next step was to file a formal complaint with the bank’s complaint department. This is rarely fruitful, but is a required formality before moving onto the next crucial step. Unsurprisingly the bank decided that the bank had acted appropriately.

The case now forked into two parallel paths.

On one side, we sent legal demand letters to the merchant’s beneficiary bank in Hong Kong. These were prepared at our direction by a law firm with which we have a close working relationship, and signed by a lawyer. The letter alleged that the bank was doing business with an illegal entity and accepting payments on its behalf. This alone is often enough to trigger a refund, or it can become the basis of further legal claims.

On the other side, we filed a formal complaint with the FOS, the Financial Ombudsman Service of the United Kingdom. The complaint detailed our client’s bank’s improper actions in allowing the wire transfers to be made in the first place, as well as too quickly acceding to the merchant’s claims.

What came next was an excruciatingly slow and aggravating back and forth with the FOS agent assigned to the case. The agent requested numerous clarifications, and each time M.C. would email us with the agent’s questions so that we could formulate the best response.

In the end, two facts worked against M.C. First, he was not a completely novice trader. He had dabbled a little in online trading previously, so the FOS claimed that he should have known better, and that the fault lay not entirely with the bank. Second, he waited a rather long time before filing his original claim. Despite all this, we succeeded in convincing them to approve a full refund.

However, when the bank appealed the decision, the FOS adjusted its verdict. Their final judgement, rendered a full three years after we began working on the case, was for a 50% refund (£70,000) plus interest and a £150 inconvenience for a sum total of nearly £89,000. In addition to the £55,000 in chargebacks received previously, our client finally received back £144,000, or 64% of his total disputed funds.

The MyChargeBack Difference

Knowledge. We understood what documentation was needed, and how to present it with maximum impact.

Strategy. We knew when to push the bank, when to hold back and we knew which specific  legal tactics to use against which bank.

Tenacity. So many times over the course of this long and complex case a point would be reached where amateurs going it alone — or even less experienced professionals — would have given up or made the wrong move. So  when others would have stepped away, we kept fighting for our client for a full three years until a very substantial victory was achieved and he was able to get his financial life back on track.

 

For more information about MyChargeBack’s wire recall services, click here.

At a Glance: MyChargeBack in the UK

  • The case involved the loss of £225,000 to an unregulated online investment broker.
  • The payments were made by credit card and bank wire.
  • The original payment disputes largely failed.

MyChargeBack’s persistent efforts resulted in a credit card refund after one year, and a bank wire refund two years later, with a total of 64% of funds recovered.

Payment made by the merchant

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