Your Dispute Is the Only Alarm the Payment System Has. This One Rang at 89% and Nobody Moved.

If you have ever filed a dispute with your card issuer and wondered whether it accomplished anything beyond getting your own money back, here is your answer. It did. Your dispute is the loudest alarm the payment system has.

The catch is who gets to walk past it.

On September 4 the FTC announced that Nuvei, a payment processor most people have never heard of, will pay $4.85 million to settle charges that it opened and kept merchant accounts for companies it knew or should have known were running scams. The complaint was filed the day before in federal court in Arizona. The Commission vote was 2 to 0.

Three merchants are named: an offshore tech support operation called Reimage, a business-opportunity seller the FTC says pitched false earnings claims, and an outfit the FTC says impersonated government tax authorities.

Reimage is the one worth reading about. The pitch was $34.95 for PC repair software. The complaint describes a buyer in February 2015 who paid it and was then routed to a Reimage telemarketer, who explained that the software they had just bought would not fix the problem, and pitched expensive tech support instead. Nuvei processed more than $30 million in payments for Reimage between 2017 and 2023.

Here’s what they don’t tell you about how any of this gets caught.

Visa and Mastercard both treat roughly a 1% chargeback rate as the line where a merchant becomes a problem. A chargeback is what happens when you tell your card issuer you did not get what you paid for, and the issuer claws the money back from the merchant’s bank. That ratio is the industry’s own fraud thermometer, and the only thing that moves it is customers filing disputes.

In April 2021, Mastercard notified Nuvei that Reimage’s account had a chargeback count ratio of 89.75%. That is 184 chargebacks out of 205 sales in a month.

Not one percent. Eighty-nine.

Reimage’s answer was not to stop. Per the complaint, it moved sales volume to other processors so the monthly count at Nuvei would drop back under the trigger. Across all of 2021 the account still averaged over 8.5%, which was 1,108 chargebacks on 12,934 sales, in an internal report written by Nuvei’s own head of risk management. Nuvei had seen numbers like that before it ever signed Reimage: a July 2015 report showed rates as high as 8.5% on Discover over the prior nine months.

Nine out of ten buyers in one month said “I did not agree to this,” in the most formal way the system allows. The account ran two more years.

This is dumb, and it is dumb on purpose. High-risk merchants pay higher processing margins. Mastercard’s fine over the April 2021 breach was 1,000 euros, and per the complaint Nuvei passed it straight on to Reimage. That is a rounding error against $30 million. So is $4.85 million.

Use the lever you actually have.

Pay with a credit card for anything you are not sure about. Not debit, not a bank transfer, not a gift card, not a wire. The chargeback right on a credit card is federal law, and it is the only one of those that puts your money back while somebody else argues about it.

Dispute with your issuer, not the merchant. Calling the company that charged you gets you a retention script. Filing the dispute gets you a case number, and it gets counted in the ratio that eventually forced this settlement. If your issuer denies it, ask to see what it relied on before you give up.

And never call the number in a pop-up telling you your computer is infected. That pop-up is the whole business model.

The $4.85 million is earmarked for consumer redress, and the release does not say whether buyers will have to file a claim. If you paid Reimage between 2017 and 2023, pull that charge off an old statement now and keep the date and the amount somewhere you can find them.

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