EcommerceBytes-NewsFlash, Number 621 - October 03, 2003     1 of 2

American Express Agrees to Honor PayPal Complaints

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In mid-September, New York's Attorney General reached an agreement with American Express Co. resolving cardholders' complaints that the company had denied requests for "chargebacks" in cases where goods ordered through the online payment service PayPal were not received as promised.

"Consumers who use credit cards to purchase goods online, whether directly or through payment services, very reasonably expect that their credit card issuers will reverse the charges if the goods never arrive," Attorney General Spitzer said. "Without these crucial chargeback rights, consumers are no more protected than if they had sent cash through the mail."

Under the settlement, cardholders who have previously sought "chargeback" credits will have the right to reassert these chargebacks. American Express will credit or refund cardholders' losses, in cases where goods were ordered but not received. The sum of these disputed charges totals over $3.2 million, some charges have already been independently resolved.

Spitzer said that American Express cooperated with his office's efforts, and praised the company for agreeing to issue refunds and recognizing the importance of this issue to its cardholders.

Under the agreement, American Express will notify affected cardholders of their rights to reinstate prior disputes for PayPal transactions, and establish a dedicated toll-free telephone line to assist and advise these cardholders. The company will pay New York State $85,000, and furnish the Attorney General with an accounting once the refunds have been issued.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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