Easing The Burden of Chargebacks in Multifamily

When incurring chargebacks on credit cards, multifamily properties need the most proven expertise possible. The fact is, chargebacks come in all shapes and sizes and can be complex to navigate when a rent payment is disputed. Understanding what credit card companies look for when determining if a chargeback is warranted isn’t always that easy. In multifamily, chargebacks are not uncommon and can be a stumbling block in getting paid for rent and other services. Regulations favor consumers who dispute a credit card charge and essentially put the onus on the property to prove the chargeback is not warranted. Regulation Z of the Truth in Lending Act allows consumers no-questions-asked reversal rights to negate illegal charges. Some leverage the regulation to buy time for paying bills, even though they have no real intentions of walking away from the charge. This can be particularly frustrating for properties at rent payment time.  A resident with an empty checking account may pay rent or property services on time with a credit card only to dispute the transaction a couple of weeks later. For at least two weeks, the account is current, until the credit card company kicks back the charge because the resident claims the charge wasn’t theirs. The charge is removed from the property’s merchant account, and site staff are then faced with uncomfortable task of confronting the resident and proving the transaction should stand. Welcome to friendly apartment fraud, which can take on many forms – some of which can be pretty strange, says RealPage SVP Nancy Morlini. “With zero fraud liability, we’ve seen residents who say they lost their card and that somebody paid rent for them with it,” she says with a laugh. “A property manager basically has to take the consumer’s word for it. Friendly fraud is consumers leveraging the system to their advantage.” Others are bolder and simply make charges they don’t inte...