Playing with Fire

Christopher Costigan, Sports911.com

It’s not just the number of chargebacks being declared by Firepay customers, but the lack of cooperation from their customer support and fraud departments that have sports book and online casino operators flustered.   

“What really bothers me the most is that Firepay will not even half way deal with us on these issues,” complained Patti Gonzalez, a representative of Sirbet.com in Curacao.  “Firepay is saying they have a fraud department but if fraud occurs there is nothing they can do about it.” 

Like NETeller, Firepay acts as a web-based cash account where individuals can easily transfer money between their own bank and Firepay.  Such alternative payment methods have become a fixture of the online gambling industry in recent years though both NETeller and Firepay appear to hold a quasi-monopoly.  PayPal maintained a stronghold in the industry until late last year when they were purchased by eBay and forced to give up their online gaming client base (some accounts suggested gaming accounted for upwards of twenty percent of PayPal’s business).   

Customer service issues continue to plague this sector of the industry for whatever reason, though NETeller appears relatively unscathed.  For most players and merchants, Firepay represents the next best thing, and the talent pool greatly deteriorates from that point on.    

Sirbet recently began offering special bonuses as an incentive for their customers to switch from Firepay to NETeller. 

The problem with Firepay as Ms. Gonzalez sees it, unlike NETeller, there is no waiting period with Firepay and a customer can place bets over a seven day period before his or her bank approves the account.  This may be great for the player, but it could spell failure for a poorly equipped merchant.  Often times a player will lose over this period of time, then proceed to charge back.  This type of structure is bound to breed scams in an industry that practically welcomes thievery with open arms.   

Take for example Sirbet player David X.  He deposited $15,000 into his Firepay account.  It cleared according to Firepay.  Sirbet then lets him begin playing.  He wins $10,000.  His balance is now $25,000 ($15,000 plus the $10,000).  Patti Gonzalez pays him out the entire $25,000.  He goes on to deposit another $10,000 into his Firepay account.  It does not clear.  He loses the $10,000.   

“We then get an email that David X. never had $10,000 to begin with,” Gonzalez said.  “We learn that every single deposit into Firepay was charged back.” 

It turns out the guy filed what is known as an R10 form with his bank whereby he is denying all such transactions. 

“If he is denying every transaction he should also be denying the $10,000 we deposited into his account!” 

Corby Miller, Co-Director of Sirbet cannot understand why Firepay has given any type of merit to such chargebacks. 

“Is it not proof enough that the customer sent money to us when he received money from us? Miller asked.  “This seems logical as it is how most fraud departments stop chargebacks like those that have affected our operation.” 

David X. is by no means an isolated case.  All totaled Sirbet incurred just over $60,000 in chargebacks during the month of May alone through Firepay.  Since the sports book opened a year ago, there have been fifteen customers who charged back using Firepay, of which five of these were over $5000, all five were also from the same area in California.   

“This is not fair,” Gonzalez said.  “(The) customer has the power to take funds out during this six or seven day clearing time.  We get hurt by people pulling their funds, similar to those Western Union scams that used to occur where customers would pull back the funds before the sports book had a chance to claim them.” 

Firepay has offered suggestions to its merchants that should prevent chargebacks from occurring, specifically, requiring the customer to provide more than one form of ID and written authorization. 

Freddy Martinez, Customer Service Manager for Gamblers Avenue, has had experience with Firepay in the past and he agrees there are many books offshore that are especially vulnerable to chargebacks as it relates to this product. 

“(Firepay) is really not that bad,” explained Martinez.  “But you do have to be organized and have an accounting person watch them like hawks.” 

With that said, Gamblers Avenue for whatever the reason has elected not to accept Firepay.   

One sports book owner, who wished not to be identified, has been especially caustic towards Firepay over the past year. 

“You can tell (whatever sports books are having problems) it will only get worse and to find another processing company,” he stated.  “They are doomed.” 

This operator referred us to a poker site he claimed would have nothing but bad things to say about Firepay.  As it turned out, they had nothing at all to say as they failed to return our correspondences.   

While Firepay may offer assistance on how to avoid chargebacks, they also pass the bill on to clients as if the operators have not been punished enough. 

“Firepay says we should have the player provide identification and documents authorizing we can take (the) money, but what is to stop them from denying the signature is theirs?” Gonzalez asked. 

911 had an opportunity to approach Mr. Mitch Rosenberg of Firepay in hopes that he could answer some of the questions posed by the eCommerce company’s merchants. 

We asked about the seven day clearing period and the precarious situation merchants face during this especially long waiting period. 

“The nature of the US banking network is such that it can take up to seven days to see if an electronic check has been returned for various reasons,” Rosenberg explained.  “These reasons would include anything from insufficient funds to a closed account.  Surefire regulates the spending volumes for new accounts so that merchant’s exposure is limited until the customer’s account has aged beyond this waiting period.  Once an account has established a trustworthy spending history, their limits are increased.” 

Such a policy apparently backfired as it pertained to Sirbet, judging by the $60,000 plus in chargebacks that occurred during the month of May.   

“The best recourse for a merchant is to make sure they have established their own fraud protection strategy with customers who visit their site,” Rosenberg went on to say.  “This is true regardless of the payment method.  Return rates and incidents of R10 disputes will vary from merchant to merchant and are usually similar to the chargeback rates for credit card transactions for the same merchant.  In essence, a merchant’s own ability to manage fraud is the best defense against loss.” 

But what if a player has a history of charging back through Firepay, does the eCommerce company not have a responsibility to warn its merchants and prevent that customer from using their product?

“Yes, it is SureFire’s strict policy to terminate a consumer’s account, and track related information on that account in our negative database, so that this consumer can never process with a SureFire merchant again.  It is our policy to publish the list of fraudulent accounts to merchants whom the consumer has recently visited, in order to allow them to update their risk data as well as to allow them to hold funds against FirePay returns.”

In regard to assistance offered, Rosenberg insisted his company is more than willing to help out merchants hit by chargebacks.

“It is Surefire’s policy to assist our merchants in disputing either Firepay brand or Credit Card transactions where the appropriate regulations allow for a dispute.”

Gonzalez feels that Firepay only reacted to Sirbet’s plight after learning that 911 would be investigating the matter.  Firepay responded that Sirbet was harder hit by chargebacks than any other merchant and they would be following up with the player’s banks to get copies of the R10 forms.  Furthermore, they explained that less than half a percent of FirePay transactions show up as R10s. 

At least one gentleman we spoke to remained unimpressed with Firepay’s policies and explanations for the chargebacks.  Few are more established and as well regarded in Costa Rica than this man.  As one of the first online sports betting operations to set up shop in the Central American nation, his business used Firepay back at a time when they were known as Mpact (a credit card processor).

The man wished to remain anonymous, fearing legal retribution from Firepay, but his story is one that cannot remain untold.

“Firepay used to be Mpact.  I used (them) several years back when I was running as (sports book name deleted).” 

“What they were doing at the time was processing cards as normal and then months later when they thought one would not notice they would send out charge back notices for several transactions and deduct this amount from one’s balance on hand . 

“I caught them doing this as a personal contact of mine was playing into me and they just happened to put a charge back through in his name.  When I contacted him about it he said what are you talking about why would I ever do that? He then sent through a copy of his credit card statement to prove that the charge was made. 

“On top of that I was also informed way back by the infamous Samantha at the  "DOOMS" (otherwise known as The Dunes) that they received a fortune in chargebacks before they went out of biz , but when they audited and back tracked many of these were also false.  I do not know what the final outcome was in this case and guess I never will. 

“When I approached Mpact (now Firepay) about my own issues at the time with this they just gave me the run around and never answered the question as to why my friend’s chargeback appeared, therefore I just stopped using them. 

“They do not do this in large amounts as that would make it very obvious, what they do is a few hundred here and there and from various different accounts, across the board this would add up to a decent skim . 

“The merchant has NO way of checking if chargebacks are genuine as a chargeback reference is created by Firepay and sent to the merchant.  The merchant just has to take their word for it, or contact the client which was done more than once and several claimed that they had not done this, cc statements were provided by more than one person to prove it. 

“I did at the time take this up with MPact ( Firepay)  but never really got any straight answers, so I just dropped the issue and moved on to another processor at the time.” 

It is not known if today’s Firepay team engages in similar practices.  The above scenario took place over two years ago.  At that time, another now defunct Costa Rica-based online sports book, All American Sportsbook, contacted Gambling911.com threatening to take legal action against Firepay, claiming chargebacks were “internal” and most were originating from Canada where the company is based.  These allegations were never proven and a law suit never commenced.   

www.mycasinoopinions.com offered a pretty interesting assessment from a player's point of view in regard to Firepay. 

If you are considering signing up for FirePay, reconsider. Visit their website, and try to find an email address. Look under HELP, nope, not there. Read their agreement, NOPE, even though mention contacting them through email, NOPE, not and address given.

I had to search all over the site, and finally, I clicked on the MERCHANTS area, and there it was. So, you can only get to a simple contact info page if you pretend you are a merchant. That should tell you who they favor, huh?

The complaints from player, however, are few and far between.  911 has never received a complaint from players directed specifically at Firepay.

Patti Gonzalez of Sirbet feels they probably favor wise guys and scammers more than any other group.  But with that said, she acknowledges that most of her “legitimate” Firepay customers do like the product.

“We don’t want to hurt Firepay but we think they should be stricter in how they do things,” Gonzalez said. 

Furthermore, Gonzalez admits Sirbet does not have a problem with Firepay’s Surefire platform, which strictly processes credit cards.

And the product certainly must have its strong points.  After all there are well over a thousand happy merchants using Firepay.

Since first approaching 911 about their plight, Sirbet has consulted with the eCommerce provider on ways to prevent chargebacks. 

“After consulting with Firepay we have had yet another customer charge back for $3000,” Gonzalez disclosed.  “We required this individual to send us his social security number and driver’s license and a handwritten form stating that he was playing at Sirbets.  This is what you asked us to do (Firepay) now let’s see if you can get us the funds.” 

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