Financial Disputes

Overview

Financial disputes take all forms, the following is a list of the financial disagreements that we see most often among our clients who seek chargeback services or wire recall. 

It should be noted the difference between a dispute and fraud. The first two items on the list refer to disputes which occur when two parties openly disagree about whether or not there should be a chargeback. The merchant or broker believes they are in the right and at least try to provide reliable arguments to back up their claim. Clients justify why they believe they deserve to have their money back. No one is necessarily accusing the other of a crime. 

However, there can be a fine line. The merchant or broker may be actually denying service or providing a defective product and claiming falsely that they are not. In addition, the customer can be the one committing “friendly fraud”  and taking advantage of the chargeback process. There are also outright frauds, such as merchant fraud, crypto scams and forex trading scams. Those behind them disappear or stop communicaiton and hardly try to seem legitimate after a certain point. 

There are credit card chargeback and wire recall services for disputes and frauds alike, but it is important to understand the difference between the two, even though some situations are ambiguous and it can be hard to tell whether the consumer or the merchant is dealing with a dispute or a potential fraud. 

The following list are common types of disputes and examples of fraud. Fund recovery efforts are possible with each type of dispute or fraud, but some are more complex than others. For example, it can be easier to obtain a credit card chargeback if there is a merchant dispute than to track down those behind a bitcoin mining fraud or a ransomware attack and recover cryptocurrency. However, even in the latter situation, fund recovery is possible.

Merchant Disputes

Merchant disputes occur when the customer and the merchant disagree about whether or not the customer should receive a credit card chargeback or a wire recall. The customer may claim that they paid for a product that either did not arrive or was defective. 

They may also say that the actual product or service did not match up with the description and say that the merchant was leading customers to expect and pay for something vastly different than the actual item they received. The result may be the merchant agreeing to a chargeback or the dispute going to an issuing bank for a final resolution. 

Broker Disputes

Broker disputes arise when a trader or investor claims that the broker they have been working with is not fulfilling what was agreed to in the terms and conditions or is not fulfilling promises or behaving in the way a broker can be expected to. 

One common complaint is that the broker will not release client funds. These disputes begin as complaints and are often brought by a client to the broker’s regulator who can settle the matter. If a broker is not regulated, chargeback and wire recall can be more complicated. 

“Friendly Fraud”

Friendly fraud can be hard to detect, because it begins as what seems to be a legitimate request for a chargeback. Unfortunately, the occurrence of friendly fraud confirms that there are some consumers who take advantage of the fund recovery process to use items and then ask for their money back. 

Customers will claim that an item they purchased was defective and did not arrive and demand a chargeback. The merchant will refund their money, assuming that the customer is acting in good faith when in fact they are trying to get free items. Friendly fraud is like the web equivalent of shoplifting at the shopping mall and is becoming a problem not only for merchants but for customers who legitimately ask for a chargeback and are greeted with suspicion.

Merchant Fraud

Merchant fraud occurs when a merchant deliberately sells a product or a service that is defective or non-existent to get money from customers. These merchants will either find ways to argue that the customer is wrong when they complain about items or they will disappear after they have sold the item to the customer. On social media, this is can be simple, because the merchant can block the dissatisfied customer and sell products under different names. 

Since fraudulent merchants often change their identities, it can be a challenge to track them down. Fund recovery services can provide assistance for chargebacks or wire recall from fraudulent merchants who disappear by participating in efforts to track them down first.

Various types of Scam

Forex Trading Scams

Forex trading scams are among the most common types of broker fraud.

Crypto Scams

Crypto scams are the fastest-growing type of fraud and they are everywhere.

Ponzi Schemes

Unlike forex broker scams, they tend to target long-term investors and often the elderly.

Loan Fraud

Loan frauds target debtors and those with poor credit.

Romance Scams

Romance scams are accomplished through catfishing.

Sweepstakes or Lottery Fraud

Sweepstakes or lottery fraud begins with an email or a text to a large number of people telling them they have a huge cash prize.

Retirement or Unemployment Benefits Fraud

Some of the most vulnerable people in society are unfortunately targeted by cyber criminals.

Identity Theft

The opportunity to commit this crime can be provided by phishing for data directly from the victims or using malware or spyware.

Forex Trading Scams

Forex trading scams are among the most common types of broker fraud. As with broker disputes, it can be difficult to know, at least in the early stages, whether you have a reasonable complaint with a legitimate broker or if you are dealing with a fraudulent broker. 

There are tell-tale signs, but many of these can be seen later on when the broker refuses to release funds, ceases communication altogether, freezes an account or disappears. Credit card chargebacks or wire recalls can be an effective way of getting money back from a forex trading scam, but often they have to be tracked down first. 

Crypto Scams

Crypto scams are the fastest-growing type of fraud and they are everywhere. The most popular type of crypto fraud is social media imposter scams. Someone posing as a celebrity will offer a hugely profitable cryptocurrency deal and will end up taking the money. There are also fake bitcoin mining apps and ICOs that are not genuine. 

Many cybercriminals think they can get away with crypto scams because they believe their identities are fully hidden on the blockchain. Although cryptocurrency fund recovery is more difficult than Paypal chargebacks or credit card chargebacks, they can be accomplished with tech-savvy experts and law enforcement officials.

Ponzi Schemes

Ponzi schemes are false investment funds. Unlike forex broker scams, they tend to target long-term investors and often the elderly. In a Ponzi scheme, money flows in and out of it without ever being invested. 

The Ponzi scheme fund manager will pay those who want to make withdrawals with those who fund accounts. They make money through huge commissions and by discouraging people from making withdrawals. At some point, the head of the Ponzi scheme disappears with the money, although some deceive their clients for years. 

Loan Fraud

Loan frauds target debtors and those with poor credit. They usually start with someone posing as a service that can find quick loans with low interest rates regardless of customers’ credit rating. People who are desperate for money and are unable to borrow more from their bank often jump at these opportunities and offer them a high fee for finding these loans. Since these fees are upfront, the person disappears with the money and does not offer a loan opportunity, or they will say the loan was declined. They may ask for more money to look for additional loan opportunities, which of course, never come. 

Romance Scams

Many people find love online and social media seems to be bringing people together. It is estimated that a third of all couples today met online. In addition to love, there is also theft lurking on singles forums and platforms.

 Romance scams are accomplished through catfishing or faking an identity. The creator of the scam posts pictures of an impossibly attractive person and targets a likely victim to chat. At some point, they will change to the topic to money and ask to borrow some money that they will pay back soon. They then disappear with the money and change their online identity.

Sweepstakes or Lottery Fraud

Sweepstakes or lottery fraud begins with an email or a text to a large number of people telling them they have a huge cash prize. Although these contests almost never reward money to people to do not enter, many people believe that they have won the prize.

The message will say that the winner must pay a large fee to secure the funds very soon or the opportunity will disappear. When they pay the fee, communication is cut off. Actual lotteries and sweepstakes do not charge such fees to winners.

Retirement or Unemployment Benefits Fraud

Some of the most vulnerable people in society are unfortunately targeted by cyber criminals. One common method is to phish for information or to retrieve personal information by phone or email. 

They do this by posing as a representative from a government organization seeking verification. They will ask for personal data and a photo ID but will use this data and picture to claim the benefits themselves. Often people do not realize they have been robbed until they go and claim their benefits only to discover they have been taken already. 

Identity Theft

Identity theft is particularly threatening because it enables thieves to use bank accounts, social media accounts, claim benefits and send fake messages by email. The opportunity to commit this crime can be provided by phishing for data directly from the victims or using malware or spyware to penetrate into devices. It can be difficult to pick up the pieces from identity theft and find those responsible, but law enforcement and fund recovery services are often successful in dealing with this kind of crime.

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