November 19, 2009
-
News: Visa Wins In Court
An Arizona Court of Appeals Judge says Visa was within their rights when the company reversed charges. Appellate Court Judge Philip Espinosa ruled in favor of the giant credit card network in a suit filed by ANS Distributing over more than $150,000 worth of credit card charge backs. ANS Distributing, a leading petroleum equipment distributor that provides parts and equipment to gas stations, claimed that Visa was in violation of their contract when the company reversed the charges for orders received over the internet from customers in Singapore. According to court records, Visa originally approved and paid ANS for the orders and later determined the credit card charges were fraudulent. At that time, Visa reversed the charges and withdrew the money back out of ANS's account.
In the initial court proceedings, ANS Distributing argued that Visa had agreed to accept credit card transactions that took place over the internet where there is no guarantee that the card is actually in the hands of the owner. The judge of the original suit threw the case out of court saying that according to the terms of their agreement, the credit card company had the right to do what it did. ANS was not satisfied with the ruling and filed an appeal. The new ruling also sided with Visa saying that merchants who conduct online business is responsible for knowing the limit of protection from the card company or be prepared to lose the money.
The distributing company presented a signed affidavit by Thomas Spencer, its comptroller, which stated that Visa charges a higher processing fee for e-commerce credit card transactions and ANS believed the higher fee was to cover fraud protection. The company further argued that the understanding was derived from verbal communication between Spencer and Visa. The Judge ruled that although he has the power to override written agreements to include verbal representations, there was no evidence that Spencer never mentioned he had such knowledge in his affidavit. Furthermore, he added that there was no evidence that Spencer signed any contract or that he was even present during any negotiations. Therefore, the Judge said ANS had nothing to back up their claim.