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2checkout screwing me over $35,000 USD, advice needed

Discussion in 'BlackHat Lounge' started by shapsp, Oct 23, 2012.

  1. shapsp

    shapsp Power Member

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    Dear members,

    i started my journey here. But, 2checkout is almost putting an end to it by forcing me to pay them over $35,000 as negative balance.

    Here is my plight,

    i was selling accessories from china to my customers, was using 2 checkout for payments for nearly 6 months to do so.
    And, business was good.

    I thought of expanding product selection and when i did keyword research and some market research, i found china phones were selling well too.
    So, i tried to hand pick the best possible and sell it to my customers. Got to agree, was a bad idea! As the phones were not that great despite hand picking the best possible out there.

    Upon selling like 10 or so phones (just starting off), i got a rude shock when 2checkout closed my account suddenly. Unlike PayPal, (paypal gives you a warning first.) 2checkout just closed my account and waiting for me to call them without even sending a email to me. I called and got my account restored and also i told them i won't sell phones using them. I kept to my words and no phones were sold. Things were fine for 3 days.
    And, then they closed out my account again. this time, i only saw a white screen when i logged in. And, it read that my account was closed.

    I tried emailing and calling but they refused and avoided me like trash and at this point of time, they held nearly $25,000 in the account and they promised to release it 90 days later. Happens with PayPal too, so i was cool and thought i will just struggle for 90days and see my $25k again 90days but NO. There were suddenly alot of chargebacks and every chargeback despite challenging, they charge $15 for admin fee to challenge, i lost the chargebacks and now the chargeback fees were increased to $50/chargeback. And sometimes, my orders were only like a couple of dollars. (i sell accessories so value isn't that great). So, my money was slowing dissolving and the worst part was i could not have access to my account dashboard, as such, i could not see anything which is going on. i didn't know how much i was left with, who was refunded, and who are disputing i only received emails and 2checkout expects me to make do with it.

    90 days passed and i waited for 2checkout to email me. They didn't. Gave them around 5 more business days, no email again. So, i emailed and asked how much money is left and when will they be sending the money back, again there was no reply for 3 days - 3 mails. And finally to my dismay, the risk co-ordinator mailed me and said they will be forfeit the money. close to $13K usd now. yes, they refunded $12K to my customers. And, to top it, they said that $410,000 fine is pending on us and that this large sum of money has been taken from 2checkout and that 2checkout is disputing with their service provider to reduce or eliminate the fine. And, there was no proper invoice sent to me. No signed documents. Only a crap quality A4 scanned kind of document which looked like an amateur bill but totaling to a whooping amount of $410,000 for various violations. I only re-sold phones which top 1000 alexa sites were selling. Even if i had used E--Bay or PayPal, the punishment would not have been so great.

    And today another person mailed me and said that we owe them $37K now. (negative balance) of course this negative balance plus the available fund $13K amounts to $50K, so, i assume the so called fine was $50K for doing a mistake once and taking all my efforts to stop selling the phones and closing the website down.

    Do you people think, 2co is scamming or ripping me off? I am not a big time seller and $50K to anyone is alot of money and they just want to get it from me without any documents and the so called fine invoice was issued to them 1 month after our account was closed. Can it be a false document? What should i do right now? I am totally lost. It is really unfair for them to push all the charges to me. I am aware that they have plenty of sellers who are selling f.a.k.e.s really f.a.k.e.s! nintendo ds and etc. and, so, they could have met with a heavy fee and now they are covering their losses by segregating the losses to sellers like me?

    and these fines are coming from a payment service provider who accepts cards for 2co and normally the parties which can issue fines are mastercard, visa, but i don't see any documents from them.

    Can all this be a planned ripoff? no proper documents. 410,000 fine and then reduced to 50,000 after my mail and now i am forced to pay it up if not there will be collection agency. i live in singapore, not sure how collection agency work here. but, heck! i didn't do anything wrong to be in such deep shit. my mistake was the phones and i quickly corrected it once told and paid the price with account closed and money held but now another $37k burden is chasing me. this is unfair. do any of you have any advice for me?
     
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  2. Tim Roth

    Tim Roth Junior Member

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    Sue them. Tell them you will sue them if they don't send you all the documents related to the bills and damage you provided.
    No way the payment processor/account can be so unprofessional.
     
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  3. shapsp

    shapsp Power Member

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    Thank you, tim. I am not so sure about sue-ing them.
    even though i need the $13K usd badly, at this moment, i would rather leave with no money at all instead of getting a $37k fine.

    the problem is they can pluck out an invoice/document from the PSP (payment service provider) just like that.
    Imagine, 2checkout could be/should be their biggest customer and this PSP (payment service provider) is based in Cyprus so, a fake invoice being generated is not a big deal, if my customer need a marked up invoice to profit more, of course i will do it. same could apply here.

    i am just worried that things could get uglier, a 410,000 fine could become 50,000 in 2 days and it may again shoot up to 410,000. because, all the while, i was not at all informed such a huge fine was going on against me (if it was true) it is nearly half a million. And they could not even bother to mail me. but, when i emailed 3 days - 3 times, they mail and speak crap. :(
     
  4. Danny1111

    Danny1111 Elite Member

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    you can't sue someone if you were doing something illegal .. ie selling fakes

    honestly I would go speak to an attorney and not take advice on a BHW forum - simply because it's 50k now but if you start incurring legal fees on top of it the amount will grow quickly -- so best find out your options now before you go too far down that road.

    this is probably a reason why most people should be operating as a company - so that if the crap hits the fan - you just bankrupt the company then close the company .... anyway find out the facts asap you will sleep better at night.
     
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  5. Tim Roth

    Tim Roth Junior Member

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    I think closing deals with them, you will never see a penny and they won't bother you about the "fine".

    I will really talk to a lawyer about the situation. Are they affordable where you live? Find a good one and let me know what does he thinks. For at max. a couple of hunderds, you will sleep fine at night and maybe you also become richer.
     
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  6. KillerHeck

    KillerHeck Regular Member

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    I'm really sorry that this happened to you.. I know how it feels to have your money frozen (happened to my Paypal account once). But then losing it all and even more to chargebacks is just outrageous!

    I don't use 2checkout myself, but from what I've heard it's a reliable service. Never the less, someone else could be abusing your situation. Anyway I think your best approach is to get some advice of a lawyer and try to get all the proper documentation from 2checkout, like where did all your money go and who did the chargebacks. Make sure they proof to you that you own them that amount.

    I personally would never pay anything to them. If they send a collection agency I would make sure that there is nothing to collect (move any money or anything of value you own to a reliable family member). Good luck!
     
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  7. Comic

    Comic Regular Member

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    Sounds like they got nailed by Mastercard. Are you in the states? If so, I would at least speak with a business lawyer. If not, then I would forget it. Yeah it sucks but your accounts would have been frozen under Paypal as well. My guess is something you sold as genuine was reported as a fake. Selling anything from China is risky because the bastards steal and duplicate anything that isn't nailed down.
     
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  8. vanessasweet

    vanessasweet Junior Member

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    Hi,sorry this happen to you.Did you save any invoices from any transactions?If you dont have any filesfor any transactions it is going to be hard to figure out what money went back to each customer.Email them and ask them for a full transaction copy of all transactions for the last 90 days.Second,Best thing you can do is consult with a lawyer.
     
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  9. shapsp

    shapsp Power Member

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    i am not in the states, i am in singapore. so, they won't be able to get collection agency after me?
    also, is forming a pte ltd company now too late?
     
  10. Tim Roth

    Tim Roth Junior Member

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    That's absolutely FALSE. You can sue anyone for any reason.
    Where does he mentioned he was selling fakes phones ? I read Chinese only, maybe not in norm?!

    The point is:
    Why is that a problem of the payment processor? They have to prove you WHY is their problem and they didn't. Speak with a lawyer as me and Danny said previously.
     
  11. shapsp

    shapsp Power Member

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    tim, i was selling china phones. and they could have thought it is fake. but like i mentioned i only resold phones which are being sold in top 1000 alexa ecommerce sites. but, i face more shit than them.
     
  12. Danny1111

    Danny1111 Elite Member

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    so let me get this straight - your legal opinion is a "drug dealer" who gets ripped off by a client or a "supplier" can then go to court and sue them to get an unpaid debt (LOL) ... he was selling fake stuff from China - if they have one piece of evidence of this -- then he is in for a world of "pain"

    seriously go see a lawyer and find out what applies to you and what doesn't.

    next time set up a company and have everything in the companies name - better yet don't sell China knockoffs and you won't have this trouble....... one of the problems you are going to have is if your "debt" goes unpaid - no other companies will provide you CC services anyway.
     
  13. Danny1111

    Danny1111 Elite Member

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    Another example .. Bernie Madoff can't go and sue Chase Bank because they should have known he was running a Ponzi scheme and he should only have gotten 10 years instead of "Life" .... if your committing "fraud" "criminal act" you can't sue someone over that same act.
     
  14. ThreadKiller

    ThreadKiller Power Member

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    I think you may have misunderstood what one can and can not do in a civil court. Madoff can sue Chase Bank, or Obama, or whoever he wants to. All one does is pay the fee and hand in the papers.
     
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  15. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    Totally irrelevant. He can sue if he wants to.
     
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  16. Danny1111

    Danny1111 Elite Member

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    well I'm talking about winning -- and you can be sued for filing frivolous lawsuit - even though it maybe hard to win ... so yeah go and file 20 lawsuits and see what your bank account looks like.... cheers.
     
  17. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    Are you a lawyer or a judge by any chance and you 've already determined the result?

    People can sue other people. Simple as that. Following your advice is like getting a beating and then saying "oh, it 's cool, I should just shut up - I can't do anything anyway"
     
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  18. Danny1111

    Danny1111 Elite Member

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    back to the thread issue -- and that is "damages" can they prove "damages" and come after you or not -- and can it be enforced in Singapore .... go speak to a lawyer -- don't rely on what you read here.
     
  19. ThreadKiller

    ThreadKiller Power Member

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    OP. I take it that the phones you have sold are regular China-phones, such as ZTE and Huawei and similar, and not iPhones/Samsung. And that the phones you have sold are not fakes.

    You'd be a fool for taking legal advice from a forum... however, since you are here already, here is some legal advice :) :

    1. I assume you have made some money, throwing in another 1000 dollars for some lawyer time could perhaps make good sense.

    2. I also guess that part of 2checkout's terms and conditions state that they can take all your money when they feel like it.

    3. The above does not mean that you cannot put forth a lawsuit. 2checkout seem to have offices in Hong Kong as well as in the USA. It could be cheaper to enter a lawsuit in HK than in the USA. And it would surely increase the cost for 2checkout to defend in a country where they don't have their legal team.

    Just my 2 cents worth.
     
  20. Danny1111

    Danny1111 Elite Member

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    "Are you a lawyer or a judge by any chance and you 've already determined the result?

    People can sue other people. Simple as that. Following your advice is like getting a beating and then saying "oh, it 's cool, I should just shut up - I can't do anything anyway"

    In that case you can sue because you have "damages" assuming you went to a hospital and had treatment

    I honestly don't think that you really have much of a clue when it comes to the law ... and I have alot more Legal experience than most but I am not a lawyer --- which is why my first response/instinct was to tell him consult with a professional because I am sure this is causing him alot of grief and better to know what your looking at ASAP - than wait for someone to start proceedings against you.