What should I do about a dealer that took a deposit then sold my motorcycle to someone else?
I recently was interested in purchasing a motorcycle from a dealer but I was about to be out of town for a few days for a vacation. I called him and said I can make a deposit on the bike for 0. He agreed and I gave him my credit card # over the phone and it was charged 0 shortly thereafter.
When I returned from my vacation turns out he had sold the bike. He would not refund me my deposit but instead he said I could put the money toward another bike. I'm not interested in buying another bike from him and want my money back. I never signed anything with him and the transaction was done over the phone. Can I dispute this charge with my credit card company?
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The magic phrase is "Then you'll have to process a chargeback". In credit card terms, disputing a charge with a credit card company is called a chargeback and vendors hate them. Chargebacks are worse than refunds. He will get charged money just because you ordered a chargeback, and then he'll lose the 0 on top of that if he can't prove to the credit card company that he delivered (yes, he's guilty until proven innocent here).
If he's smart, he will turn straight around and refund you. I've done this successfully, when I ordered something on a gift card and they charged it to my credit card. When they said that they couldn't fix it, I told them that they'd have to process a chargeback (I received the goods, but I never authorized them to charge my credit card). Within five minutes, they put the money back on my credit card and took it off the gift card.
This answer brought to you by the word "Contemporaneous".
When you dispute a charge, it costs the merchant -0 depending. As such, it is a common courtesy to warn the merchant of your intent to chargeback, to give them a chance to reverse the charge willingly for free. This shop has passed the point where you owe them that courtesy.
Of course, the shop can also lie, and say you did take merchandise, or even claim that their standard deposit agreement makes the deposit nonrefundable. Most likely Visa will side with you, and AmEx is famous for siding with customers.
In the future, there are better ways to handle this.
James Comey famously said that right after he met the US president, he sat in his car and write down careful notes from the meeting. Something felt "wrong", and he felt that he would need those notes in the future. He did this note-taking immediately, while the meeting was fresh on his mind -- trying to assemble such notes later is very difficult and widely found to be unreliable. The word for immediate action is called contemporaneous. Similarly, if you are trying to take a mileage deduction off your taxes for driving, the IRS prefers seeing contemporaneous logbook entries in a variety of inks and styles, rather than a log obviously filled out at the end of the year. Hence, the verb to Comey: to write down a verbal thing immediately afterwards.
And then we take the next step: follow it with a letter.
Dear Mr. _____ (salesman),
This letter confirms our phone call today. [date is already stated above] I gave you my credit card details via telephone and authorized a 0 charge as a deposit on the 1949 Indian, VIN ABCD1234, as shown in your photo ad, copy attached. I intend to pick up the bike when I return from vacation around (date).
If any of this is incorrect, please let me know immediately.
Sincerely,
Your Name
Have the letter capture the pertinent points of your discussion. Stuff an envelope, lick a stamp, 50 cents, keep a copy on your computer, and you've locked it in.
A few neat things happen now. First, the salesman is probably not the guy who opens the mail, so more people see it than just him, so he can't sly a deal by management. You also have impact; 99% of customers do not do this, so it establishes you as someone not to be trifled with. You have contemporaneous paper to wave around in court, instead of just his.
The last bit gives it more teeth; the judge would ask "If you disagreed with what the letter said, why didn't you object at that time?"
Then, when he (by voice) refuses your deposit return, follow with another letter referencing the first. For an extra kick, send it certified mail with the camo-green reply card. (the bright green "web code" to look up delivery confirmation isn't much use in court). Having to sign for your warning letter denies them the ability to claim they didn't get the message.
All this paper makes short work of the credit card appeal, and will be a useful counter in court to their contemporaneous notes, which could be anything.
My experience is with Visa and Amex. The companies both will tell you to check your statement and if there is any question, immediately call the card contact number and "dispute" the charge. That will protect you and put a hold on the vendor's account until a resolution is investigated and resolved. Never delay. IF you delay past the card agreement, you will have little or no chance of a dispute recovery mechanism which is as simple as a phone call.
In your case the dealer has no invoice, no agreement, no bill of sale, no contract and no charge slip. This is a no-brainer. Call, dispute, get your money credited on your account almost immediately and that will be the end of the matter. If the card company asks for a written explanation, prepare a factual summary with the dates, times and your clear understanding and submit that.
Money refunded as it should be. Always use a card for these types purchases, it is one of the benefits to help prevent being victimized by lousy vendors and cheats.
As others have said, dispute it immediately. The dispute process exists for exactly this situation.
You may also want to contact your state's attorney general. This behavior is illegal, and it may even be a crime.
You have no way of knowing how this dealer is treating other customers, but the AG's office can investigate if they see fit.
Yes, you can dispute the charge. The deposit was to secure a particular bike. The point of that money was to ensure that you were an earnest buyer, or that he would have some money for his trouble if you backed out. You didn't back out, he did; so he owes you the money back.
If there was a written agreement, he would not have sold your bike. I would tell the dealer that if he doesn't refund you promptly, you will dispute the charge and leave a bad google review. That should be enough to convince him to do the right thing and avoid the hassle of disputing the charge.
The fact that you did it over the phone and the card wasn't present makes it even easier for you to dispute the charge. The dealer knows this and is just trying to bluff you into coming back to buy another bike.
Yes, you can dispute it. But don't worry about bringing your credit card company into it yet. He knows that no court will believe you paid a deposit on an unspecified bike. He's bluffing.
Yes, you can dispute it. In principle, you can dispute any charge which did not result in any product or service being rendered.
The principle is the same is if you paid in cash. A cash transaction in which the payer received no consideration is in fact not a transaction. Legally, to take someone's money and not give them anything is just like stealing the money. With cash, it is difficult to definitely assert that the money was paid or to recover it. However, with credit card this is made simple with the process of disputing.
So yes, you can dispute it, and in principle there is nothing wrong with doing so.
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