1. Is a chargeback by the customer fair, given the circumstances of the closure? Does it matter if it's for an unused top up, how recent the top up was made or if it's for a M+ membership?

  2. What is the maximum timeframe after the charge was made that a chargeback can still be initiated by the customer?

  3. What is the likelihood of success for the cardholder in initiating a chargeback under these circumstances?

  4. Does the merchant get charged a bank fee for each chargeback whether it is successful or not? How much is it?

  5. RingPlus has not declared bankruptcy. Is this fact relevant to this discussion?

It is notable that the last two times RingPlus involuntarily discontinued member's services (in 2013 and 2014), they automatically refunded members remaining top up balances.

Although the argument has been made that members agreed that the top up was non-refundable, it is also the case that RingPlus agreed that members would be able to use their top up balance for their service. With their closure they negated members ability to do so. The fact that they blame Sprint for the discontinuation of service is irrelevant to the customer as that is their private contract with Sprint that their customers are neither responsible for nor party to. Also, the admission in the lawsuit that they haven't been paying Sprint their full bill for wholesale services, appears to weaken their case against them.

At this point the customer has little to lose from trying it if they feel justified. I would say someone who signed up in December/January or topped up in December/January would feel justified.

It could be seen as rubbing salt into the mortal wounds of ringplus but that is something for you to decide.

If ringplus ever come back they might retain details of those who did charge-backs.

I don't buy the no refund argument as no one can take money for something, say no refund and then not provide the service or goods. No refunds means a customer can't change their mind in my opinion. Probably oldbooks1 will disagree and come up with some legal stuff to refute that but I am not changing my mind!!

IMHO, a fair way would be to evaluate what you gained and paid. Maybe $25/mo/line is reasonable. Most, as in 99%, I would think are ahead of the game and it would be immoral to file chargeback. As mentioned above, this is like rubbing salt in someone's wound... kicking someone when they are down.

I would say unless charges are made AFTER the announcement, that no, it's not fair. All over the site, it lists "all sales are final" and "no refunds." While the closure is not the customers' fault, failure to read/understand/abide by the TOS is not RP's fault. They were very clear that this was an experiment and could end at 'any time'. Any time happened to be now.

Having worked with chargebacks in my current job, this varies by credit card company/bank.

Again, this would vary by bank/credit card company. All of them have slightly different policies regarding chargebacks.

Yes. It varies by credit card. Anywhere between 3-5% of the dollar amount sometimes more (I've seen some documents up to 13%). These rates are arranged with the company that is used to actually process the credit cards. (IE: CitiBank isn't the one that actually processes credit cards, neither is RingPlus, it's a third party, this third party is the one that sets the costs for different transactions.)

I don't know enough about financial law to be able to answer this question.

I think that if ringplus was bankrupt we wouldn't be having this discussion as there is no money left to give back to customers. If there is money then there is a debate.

Even if they were bankrupt the credit card companies would still be able to do a chargeback. I know they've been able to credit unused airline tickets after an air carrier went bankrupt. I think they hold unto a certain percentage of incoming payments in case they need them for future chargebacks.

Answered your own question there then!

Depends on how the company is set up. At least on the actual credit card processing side, there's nothing held that I know of. Whether there is on the issuing bank's side, I can't say, though I would say probably not, other than the chargebacks get processed at a higher rate than normal transactions. But that doesn't mean the company has any way to pay for the chargebacks.

IMHO, there are various clauses in the Ringplus ToS which, if challenged, would not withstand judicial scrutiny based on unconscionability.

We have had many discussions on this topic and usually combine several different aspects of it in a single thread. I wonder if that is why we do not every come to a firm conclusion even on the technical aspects.

It seems there are two fundamentally different issues involved and neither issue is one where there is a terribly clear answer: a) moral and b) practical


Here the issue is simple in principle: did I get what I was supposed to?

If yes, then a chargeback by definition is immoral and if no, then a chargeback is moral.

The problem is the ToS clearly implied what one was "supposed" to receive as the company understood it and as it expected the member to understand. However, members have interpreted the ToS in different ways and the company has never formally explained them.

So the answer on the moral side would appear to be that if one believes what was supposed to be provided has not been provided one could in good conscience file a chargeback. That does not mean such a chargeback is "moral" because one might be wrong.

For instance, I often see shoppers eating a grape or two from a bag in their shopping cart in the supermarket before reaching the checkout. That is actually shoplifting but many people clearly do not even realize there is anything wrong with doing that.There have been cases where shoppers were arrested for this and were genuinely shocked to learn what they were doing was not simply immoral but a more serious matter entirely.


Member Aleo101 is an expert in this field and has explained the process in detail on the forum. In essence, it works as follows. Merchants always pay a fee when there is a chargeback--the exact amount is specified in the merchant services contract. When a customer prevails in a chargeback that amount is withheld from future payments to the merchant. In some cases where the merchant has a record of large numbers of chargebacks, a percentage of all proceeds is held back to provision for future chargebacks. In the event a merchant declares bankruptcy things might become complicated if there are still reserve funds for chargebacks. For instance, the card company might no longer be free to use these funds to provide refunds to customers. Of course, there is nothing to prevent a card company from using its own resources to make a customer whole. There are rare instances where this would be a wise business decision and it probably would be done in those cases.

If a customer is unhappy with the outcome of a chargeback there is always the option to resort to legal remedies. Here again, there are choices. The least expensive would be to avail of the arbitration provision in General Rule 24. The main advantage with that of course is would give the member, in the worst of cases, with a considered interpretation by a qualified independent third party as to the exact meaning of a provision in the ToS. In the best of cases, it would provide the outcome the member wanted. Of course with RingPlus ceasing operations, it is unlikely this process would continue to function.

Beyond that, there are options in the courts and these could range from challenging a specific charge to challenging a charge and the provision under which the charge was incurred. Verdicts, if the customer did not like them, might offer options for appeals if there were grounds on which to question the judge's instructions or rulings.

Other than the chargeback route probably anything else is simply a theoretical discussion. Members who feel aggrieved are simply unsecured creditors and probably positioned very near the end of that group in terms of priority. Unless RingPlus were to prevail in its suit and be awarded compensatory and punitive damages, it would seem unlikely from reading the Complaint that there lots of resources available to compensate unsecured creditors.

Are you bored Oldbooks1?

Such a long winded post, I'm thinking you've been "charged back" by someone in the middle of the night.

Perhaps some ointment or a salve might help? :pinch:

NIce to see you again!

No thoughts on this great moral dilemma?

Nice to be seen. :slight_smile:

I can't help but feel that there some karmic retribution found in the melt down of Ring+ and the way members, personal friends, and myself were treated over on the Ring+ social forum. It's clear to me that the term Ethics is a dubious alternative fact over at Ring+. So I'm bias on this topic.

My feelings on the matter are short and to the point. If you feel you've been taken advantage of or haven't received the value of service that you paid for, take action using the tools at your disposal.

As far as chargebacks go, keep in mind that non recent ones have already been deposited into R+ bank account. So, if you chargeback 3 weeks later, they try and take that money back from R+. If their account has no money (we used to drain the merchant account bank), not sure how they will get that money back given bankrupcy. Sure, they can sue them or whatever, but, good luck with that.

RingPlus is not bankrupt and has not declared bankruptcy.

Additionally, Federal Reserve regulations on credit cards require the banks require credit card issuers to refund your charges in a chargeback if they qualify for a chargeback, regardless whether the merchant has funds.

IMHO - if you feel you got little to no promised value for what you paid, make your argument with you CC company. If you feel that even a few months of service validated your member+ and topups balances being kept, then don't call your CC company. Each person needs to decide for him or her self. I can easily see someone being fine writing off the topups, but being upset about the member+ purchased in Dec. or Jan.

We'll see if they declare bankrupcy or not. But, they can have all the regulations they want, but, if said company has no money, they cannot return the money. The bank may, but, company, maybe not. As we say, you can't squeeze blood out of a turnip. I agree from a consumer point of view.


I wonder if you could expand on your statement about regulations requiring a refund of charges in a chargeback "if they qualify for a chargeback."

Last year I had an obviously incorrect charge for a service I certainly never used and did carefully review the pertinent regulations as well as other options. My conclusion was somewhat different from what I think you may be saying but perhaps I am not clear about how you are using the phrase "qualify for a chargeback."

My understanding is that as far as the customer is concerned the option is to dispute a charge which is somewhat different.



Chargebacks, which I'm using in the same sense/term as what's often referred to as a credit card "dispute", is regulated by the Federal Reserve's "Regulation Z". If the regulations are that a consumer can chargeback a transaction successfully then the financial institution cannot deny the credit card consumer that based on the merchant's lack of funds to return the original charge, is what I meant by that.

This is my understanding of chargebacks as well. But, one must remember that not all disputes/chargebacks are successful. The CC companies CAN (and have) declined disputes.