Have you had to deal with rental application chargebacks? I am not sure how many of you out there accept credit cards but recently we have had a couple of clients who have had credit card charge-backs on their account once the rental applicant was denied.
Now a days accepting online rental applications is becoming the norm. If you require rental application fees from your applicant some property management software companies offer payment processing so you may accept the fees online. If the applicant happens to be denied most applicants are ethical enough to know that the fee they incurred for applying is justified however you will have that ONE that thinks you owe them if they are denied even though most companies have a non-refundable application fee. So this ONE person decides to dispute the charge with their credit card company as an "unauthorized transaction".
Once the charge is disputed their credit card company has to do investigate the charge. They immediately remove the funds from your account and charge YOU a fee. So what shall YOU do?
1) Challenge the dispute. You can provide evidence that the transaction was legitimate and the cardholder indeeds owes you. It is up to the issuing bank to determine if you supplied enough evidence to warrant a reversal. What you might want to add to your dispute is pointing out the "Uniform Electronic Transactions Act" (UETA) and the "Electronic Signatures in Global and National Commerce Acts." Though these applicants have signed their application and agreed to the fee electronically the credit card companies tend to approve their customers charge-back. Their argument that I have heard in these couple of cases is that they want solid true signatures (wet signatures). Of course I can't speak for ALL credit card companies but this seems to be true for the disputes I am aware of.
2) Contact the applicant directly. Sometimes it could be a honest mistake. If they continue to argue the fact they do not owe you, you could remind them that the application fee is "non refundable" and you have a right to send them to a collection agency if not paid.
3) Collect application fees directly from applicant and get true signatures (wet signatures). Some property management companies will collect cash, money orders or cashier checks for guaranteed funds.
4) Just chalk it up to the cost of doing business. The majority of people do not dispute the charge but if you have that ONE just be grateful your judgment on not placing them as a tenant has been confirmed.
I am still having a little hard time with these disputes. I don't know how you feel but how many of us go into a store, we swipe our card for purchase and never have to sign. So if I dispute and they don't have proof of signature then what? How can this be OK?
Have you had to deal with a credit card dispute?
Who was the stronger bull? or Who was the one who was full of bull?
Looking forward to reading your comments!
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Kathryn
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