Chargeback911 reached a settlement with the State of Florida and the FTC

The State of Florida and the Federal Trade Commission (FTC) managed to reach a settlement with Chargeback911, but as one of the terms of the deal, the chargeback mitigation company is prohibited from working with high-risk clients. Furthermore, it may not use deceptive tactics to stop customers from trying to dispute charges.

The court order bars Chargeback911 from certain practices

The FTC and Florida filed a complaint against the company earlier this year in April. In the complaint, they wrote that the firm and its owners, Monica Eaton Cardone and Gary Cardone, used numerous unfair techniques and tactics to stop people from winning chargeback disputes.

One such technique was the regular sending of screenshots on behalf of the clients to credit card firms. According to the complaint, the screenshots supposedly revealed that consumers had agreed to the disputed charges, which often led to recurring monthly subscription charges.

The complaint also added that, in many cases, the screenshots were not actually from the website where the disputed purchases were made. They also show that the firm has completely ignored clear warning signs that the screenshots were misleading, using them anyway in order to achieve its goals.

Now, the court order has made its proposal, and the defendants have agreed to it. The proposal has yet to be approved by the federal judge, however, before it goes into effect. But, if this happens, the defendants would be prohibited from providing chargeback mitigation services to high-risk clients.

This includes clients who rely on affiliate marketing, and negative option plans to sell specific product types, which are usually falsely marketed. Furthermore, the court order proposes prohibiting the company from using deceptive or misleading information on behalf of the clients. This would directly prevent the firm from using techniques like the Value-Added Promotion service, which allows its clients to evade fraud-monitoring programs.

Chargeback911 also has to pay $150,000 in fines

Apart from barring the company from the mentioned practices, the court also ordered it to pay $100,000 in civil penalties, plus another $50,000 in legal costs to the State of Florida. The FTC’s director of the Bureau of Consumer Protection, Samuel Levine, commented on the development, stating that the settlement order will provide important protections for consumers who tend to make online purchases.

He noted that the order sends a clear message that chargeback mitigation companies may not allow themselves to undermine consumers’ ability to exercise their rights. Any company that tries to do so will eventually suffer consequences.