I was thinking about some recent refunds that were issued for fraudulent credit card charges that were made to purchase some of my images. We've all seen these refunds, and generally I didn't think much of them until they started happening more frequently. After some discussion on the topic in another forum, I realized that these charge refunds are possibly being absorbed by the wrong party. We end up paying the price, when really the burden should fall to the sites that take the credit cards.

Think about it this way: Someone uses a stolen credit card to buy a lawnmower at Sears. Once the fraud is reported, the funds are returned to the cardholders account, and the credit card company absorbs the loss of funds. In some cases, the retailer (Sears in this example) is required to absorb the cost, especially if it is determined that the retailer violated any security procedure, such as comparing the signature if the card was used in-person. Either way, it's not the lawnmower manufacturer who gets stuck with the bill. They hand over the merchandise to the retailer, and from that point on it is the responsibility of that retailer to handle transactions.

Microstock sites often cite the fact that they take care of all the sales aspects of the business for us, which is part of the service we get for agreeing to have the companies keep a big percentage of each sale. Yet when a bad transaction happens, they ignore that part of the deal. I have found no examples anywhere that compare to how microstock companies handle these things. Manufacturers and suppliers never absorb the cost of fraudulent charges in other industries. So why are we, the manufacturers and suppliers of images, stuck with the frraudulent charges in this business?

We all know why this happens - always keep in mind that you are just small fish, who hears your complains on big Olymp? Who cares? Just another way to squeeze few extra bucks from us.

this was just being discussed here:

http://www.microstockgroup.com/index.php?topic=5843.30

I agree it has to be the agency that foots the bill, otherwise there is no motivation for them to improve their security.

Quote from: Clivia on November 21, 2008, 02:54

The big difference... Microstock sites do not buy our images, they act as agents for the sale.

all the more reason, they need to foot the bill when they do not protect our goods properly. And all the more reason why they need to be motivated financially to look after them. If they had bought the goods they'd be doing a better job protecting them.

agree. if i leave something on consignment, eg. a used camera, used children's toys,etc...
and it gets shoplifted. when i go in to collect the commissions, i get paid.
it isn't our responsibilty to sit at the store to watch our consigned goods. it's the store's responsibility.that is why they are getting a portion of the take, in the commission split.

I agree,

 This should absolutely fall on the part of the agency. They make the transaction with the buyer. It is completely their responsibility to verify all sales that is part of a sellers job. This is a good example of all photographers that sell stock having all the proper insurance to cover your ass in this business. Don't count on the reseller handling the messy stuff every time. Cover yourself and be accountable.

Best,
AVAVA

What upsets memore is the frequency in which this seems to be happening.  Are the sites taking enough measures to avoid fraud?  Even if a site is paying our share and swallows the loss - and we may never know this happened - this isn't good. 

I have recently purchased Paint Shop Pro via a download from Corel's website.  It was all very fast.  I don't remember if I was asked my real address - an information that is not in the card and would help check if I was really the card owner.  Online sales have been around for a while and I am certain that there are many ways to at least try to reduce it.

Regards,
Adelaide

There were reports of this happening in FT and BigStock also, if I am not mistaken. 

I would also think so, but in some of these refunds this was the reason given (someone here mentioned having tons of sales in BigStock cancelled because of that).

I could imagine a teen would buy porn images this way, but this is not so common in microstock, is it?

Regards,
Adelaide

 Sometimes Credit Card thieves will run small sale tests to see if the card is active before making a large purchase somewhere else. It could be that Micro is a safe place for them to test their stolen info first. Just a guess.

Best,
AVAVA

There were reports of this happening in FT and BigStock also, if I am not mistaken. 

DT is the biggest offender for me.

We also know of FT and BigStock now. Any others? Let's get a complete list here of the sites that give refunds and deduct the funds from our accounts.

I had a couple from iStock also.

Ok: The list is now:

DT
BigStock
FT

Any others?

edited to remove istock from the list

You are right Adelaide, refund given by iStock were for these 3 reasons (quoted):

�We regret to inform you that a refund has been issued for a purchase of your file #XXXXXX:
Member was charged twice for image downloaded on the same day.�

�We regret to inform you that a refund has been issued for a purchase of your file #XXXXXXX:
client downloaded this size in error, refunded as first time user and made exception, large file purchased instead.�

and:
�We regret to inform you that a refund has been issued for a purchase of your file #XXXXXX:
Member realized that she only needed small size.�

So until someone else has that kind of refund from iStock (credit card fraud), I think we should remove iStock from that list.

Claude

i haven't read the post just the title

and i'm bit pissed off with refunds....

i have an overall (sites) and since i begin with this industry.

- 4% refunds (in money)

i think is a lot

BTW, did you read this thread from a while back?
http://www.istockphoto.com/forum_messages.php?threadid=74099&page=1

I had a couple of credit card fraud reversals (around 3 months after the sale) at FT, but never anywhere else. No notification from FT. I just happened to notice my balance go backwards, then started doing screen captures until it happened again. Contacted support - usual nothing response and then Chad posted in an off-site forum that it was reversals. Fussed and said they need to provide records of this for contributors. He said it was coming and in a few days the entry for the reversal was in the stats.

At IS I have never had a reversal for fraud. Once (long time ago) I notified them when one image sold six times within 4 minutes (same size) as I figured that had to be a buyer having trouble. It was and they reversed out 5 of the charges. One other time I got  sales at two different sizes for an image and the smaller one was reversed - I got a note from IS about that.

How are you going to protest? Just by sending them an email?

Ad CC frauds: Here in Europe or in Asia are CC not much widely used but US is completely different market. Many dumb users, millions of CCs on the market. There are hundreds of specialists on stealing CC numbers. You think its difficult or expensive to get/buy CC number? Wake up... I just buy stolen CC number, register on agency under false name and buy thousands of pics in few days. How you think you can track me? I just login via some server in Africa or from internet cafe and you are out of luck...

Ad safety: Yes, internet safety is low. Photo or passport number on SS? Haha! You think its a big problem for experienced photoshop users (which we are) to tweak passport number, name and photo? How could anyone from SS know how does Burkina Faso passport look like? Its extremely easy to just steal dozens of pics on eg. Flickr or Picassa (where dumb ppl post even huge size pics), then built up portfolio under false name and passport and send it to paypal, where again is NO real personal ID unless you transfer more then $200/month. But you can have many paypal accounts, dont you? Is that scary?

Ad agencies policies: How you think you can push them? Just cry loud and your portfolio is gone, you are banned on every phorum etc. Theoretically we can make some union and try to push hard or withdraw from certain agencies. However its not likely to work because there is simply too many photographers and that also means thousands of ppl who care only about few extra $$. Microstock is a new and special type of market in photography, its hard to predict how it will evolve. But we can say that ALL agencies have agreements extremely unfair to photographers. You have nearly no rights, they can delete or ban anything anytime they like, take huge commisions and most of work and risk is on us. Its sad but the option is to shut up and adapt or give up and try different market (macro, contracts...). In case there is group of ppl trying to push Im in, but the chance it will change something is in my opinion pretty low.