Credit Card Processing — Entrepreneurs take Legal Action

The credit card is the beating heart of the “payment card” industry (PCI), which denotes credit, debit, prepaid, e-purse, ATM and POS cards, along with associated businesses.

And it’s a really big heart.  Total U.S. revolving debt (98 percent of which is made up of credit card debt) amounted to $793.1 billion, as of May 2011 (Source: Federal Reserve’s G.19 report on consumer credit, July 2011)

Credit cards are also the business of business.  Credit cards are now the most common source of financing for America’s small-business owners. (Source: National Small Business Association survey, 2008)

Forty-four percent of small-business owners identified credit cards as a source of financing that their company had used in the previous 12 months — more than any other source of financing, including business earnings.  In comparison, only 16 percent of small-businesses owners in 1993 identified credit cards as a source of funding they had used in the preceding 12 months.

Fraud is, of course, the major problem with credit card abuse.  Some of the most prevalent illegal activities include:

  • Skimming — swiping a credit card into a device such as a PDA or cell phone.
  • Spoofing/Phishing — website designed make a cardholder believe it to be a legitimate business.
  • Bank/Processor Fraud — employee criminal activity.
  • Cardholder Fraud — a legitimate cardholder purchases a good or service and then files a dispute claiming he or she never received the goods or services for the transaction.
  • Number Generators — simple software runs small dollar transactions with stolen cc numbers looking for approvals to confirm a “real” card that can be use to make large purchases on the Web.
  • Stolen Cards — thieves steal the cards from the card manufacturers, mail, purses, wallets, etc.
  • Altered Cards — an altered card refers to a regular issued credit card that has had identifying parts of it altered
  • Fake cards — harder to identify than counterfeit currency because technology has made it so that criminals can produce very legitimate looking cards and then emboss and encode them with a stolen credit card’s information.
  • Hackers — focusing on individual e-commerce websites searching for “a way in” in order to access customer cc numbers.
  • International — the vast majority of fraud with credit cards in the United States comes from overseas.

Entrepreneurs Sue

The credit card processing industry itself has become almost an entrepreneurial field in which disputes often arise among acquiring banks, independent sales organizations and sales agents over employment law issues or claims of business interference.  Litigation results from conflicts surrounding nonpayment, charge-backs, reserve accounts, breach of contract actions and more.

Hornberger & Brewer is one of the few law firms in the country whose attorneys have an extensive track record representing businesses in the credit card processing industry.

We have developed an affinity for this field and have consequently become successful in litigating disputes because of our thorough knowledge of the players, roles and issues unique to credit card processing.  Our representation of some key players in the payment processing industry of Southern California has enhanced our reputation for successful representation in credit card disputes and breach of contract actions.  Our business litigation expertise is a natural complement to these types of cases.  We have the resources and capability to create a cohesive and persuasive case which is easily understood by arbitrators, judges and juries.

Contact HGB Law for more information on how we can help you with any credit card processing industry disputes.

Verdicts & Settlements

  • $33 Million verdict Wrongful death action against O.J. Simpson
  • $19 Million verdict Malicious prosecution action against Chinese importers
  • $6.8 Million verdict Business fraud & conversion case representing a Russian company
  • $6.5 Million settlement Breach of contract action against multinational corporation resulting in a $6,500,000.00 settlement
  • $5.3 Million verdict Business fraud and breach of contract case
  • $4.7 Million verdict Wrongful death / Fraudulent transfer case representing both American and Ukrainian residents
  • $4.7 Million settlement Liver Transplant case for wrongful death of Saudi Arabian citizen
  • $3.1 Million binding arbitration Personal injury's head on collision
  • $2.0 Million settlement Fraudulent transfer case
  • $2.0 Million settlement Independent Sales Organization for alleged breach of contract claim
  • $1.75 Million settlement Shareholder in connection with corporation shareholder dispute
  • $1.5 Million settlement Fraud and breach of contract case
  • $1.5 Million Judgment Breach of contract and defamation action resulting in default judgment collected
  • $1.3 Million verdict Employment and breach of contract case
  • $1.2 Million verdict Misappropriation of trade secrets and indemnity claim
  • $1.0 Million settlement Employment termination and breach of contract case

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