I'd think if you paid affirm and the merchant hadn't shipped the item, then your recourse would be to go to Affirm, not your credit card you used to pay affirm.
Your arguement is that Affirm should be able to clip the ticket and hold no responsibility for their client fufilling their duties?
The charge back goes to who you paid for a service, if they need to pass it on, it's for them to do.
So here you'd have to contact the seller, as the other party merely gave you a credit with hopefully good terms
I think the loophole here is Affirm not being regulated like a CC. Then they'd be required to arbitrate the dispute between OP and the merchant.
Yes, and that's why the payment to the retailer should have been the one in dispute, not the loan payment to Affirm. This is how it always works when you finance through a third party... it works the same way for a car loan, a mortgage, a credit card, etc.
That window generally starts counting down once the original transaction has completed in it’s entirety, which means you’ve received the goods (until you get the goods or services only one half of the transaction has completed).
If the merchant doesn’t deliver, then there is no limit on the chargeback period, assuming you’ve made a reasonable attempt to chase the merchant and got nowhere.
I think that's Affirm's wheelhouse, providing smaller merchants of largish ticket items an easy way to do financing. So OP may not have had an option outside of Affirm to do the financing.
I'm not sure how much Affirm would care about the issue as they're pretty much a 3rd party to the entire situation. But, yeah, I think the order of operations here would be: call merchant, call Affirm, then call credit card.
https://www.reddit.com/r/Mattress/comments/ejx6za/my_casper_...
I guess it would have been smart for OP to think of that purchase as an attempt to get that item from that merchant, and just to eat the $ rather than spend a lot of time and get their credit dinged. It isn't totally different from getting a physical mattress that may or may not work, especially since they eventually did ship the item. Actually, if the mattress caused back pain and I had to go through the trouble of disposing it, that would be worse than getting nothing.
I don't believe charging back the loan provider had any outcome to getting their product/service.
Affirm was the wrong target.
Basically, the vendor said it shipped me the product but never did. However, it gave PayPal a tracking number which was for something delivered to my town. I waited several months for the vendor to make things right.
I asked PayPal and the person said there is nothing it can do. I did a charge back and the bank gave me my money back.
So no, screw the vendors and screw the payment processors. I don't owe them anything. It is their responsibility to do things right or get a charge back.
Please email me at max.levchin @ affirm.com with either the transaction ID or the email address you used to register, and I will track down exactly what happened here. I realize you may not care at this point, but I’d greatly appreciate it, as it will help us prevent poor customer experiences.
Thank you. —Max
Companies like yours make it hard for customers to reach capable representatives and routinely break service promises. Because hey! who cares if we have treated people decently? it has nothing to do with the business model.
There must be dozens of ways to ensure your customer service systems treat people properly, and you're clearly doing none of them.
Don't fix this case, fix your systems.
Whether affirm has this kind of issues as a pattern or not, i don't know. But assuming malintent is not a great pov imho.
> I hope he doesn't. [...] Don't fix this case, fix your systems.
He's literally trying to do exactly that (and acknowledged the customer is pissed and likely can't be bothered to).
How would you hande this situation?
Not the hypothetical "I'd never let this happen", because if you haven't given at least someone a bad customer experience, you didn't have customers.
I personally find Max's (CEO's) response great, and his direct reply and personal note/care is one of the best possible outcomes in this situation. I wouldn't want to discourage this kind of response.
How do you plan to fix THAT.
If you're not already using NPS surveys after customer interactions and then looking at the detractors on how to improve your service, you should start now. Could be really enlightening.
There’s a way to provide cost optimized customer service that doesn’t put the burden on the customer to drive the process.
But the chargeback doesn't erase your debt with the merchant, so they are free to collect that debt by other means, including sending it to a debt collector.
Adding a third party like Affirm makes this messier - Affirm (presumably) fulfilled their service, they let you finance the debt and they paid the money to the merchant
Their email to me saying they would be materially disadvantaged and blah blah blah got met with a response telling them to fuck off, stop emailing me and that I was reporting them to my bank for merchant fraud (which I did).
Problem solved. It's all fun and games until they risk losing their ability to process credit cards.
When a problem happens, it is "nobody's" fault. But your credit gets destroyed though.
But considering how this particular situation went as-is, I doubt Affirm would handle that request in any useful manner. Then again, I feel like this was a bit of an unusual situation that Affirm's customer service people were not well-equipped to handle (most people probably don't send chargebacks to Affirm), but perhaps Affirm does have a playbook for cases where a customer pays for something that isn't delivered.
So I'd agree that Affirm might not be the most appropriate target for a chargeback in this instance, but there might not be other options to get the merchant to send the goods. OP should have at least contacted Affirm before issuing the chargeback, though, since that's something of a nuclear option.
My car loan processor accidentally double charged my $5k loan payoff (and it didn't bounce). Customer support told me the only way to get back my money quickly would be to report fraud through my bank on the 2nd charge, which I did and the 2nd charge was returned within 2 business days. Then several weeks later I get snail-mail confirmation that my loan had been paid off and a certificate indicating this, along with a check for $5k from the lender. I called their customer support but they told me they are sorry but unfortunately since the account was already marked as paid out and those funds disbursed, I would "have" to keep it, so I gladly cashed the $5k check thereby getting my final $5k payoff of my vehicle for free thanks to the lender's mistakes.
Affirm might well be correct that the bank has not really resolved the chargeback despite what Chase is telling him.
Under the hood raising a chargeback means your bank send the acquiring bank a message (with an exponent and evidence) that immediately reverts the original transaction and transfers money from the acquirer to the customers bank.
The merchant via the acquirer can then issue a message that does the opposite, again with an explanation and evidence. Eventually the card network steps in and makes a final decision, but they charge a significant fee to do this, strongly encouraging the parties to resolve the situation between themselves.
More importantly there is no “win” message or “give up” message. Instead there’s a set period of time each party is allowed to send a reversing message, after that time period the last person to send a message “wins”.
The periods of time involved are significant, ranging from 30 to 90 days depending on where in the process you are. As a result the bank could well say they’ve given up on the chargeback, and allowed the merchant to win. But the merchant can’t be sure of that until the countdown timer on a reversal has expired.
To make things even worse, most bank employees have no idea how payments actually work. They may well be looking at a tool that says they’ve “reversed” the chargeback. But under the hood that could just mean their system won’t send any further messages, allowing the other party to eventually win.
I would suggest writing a letter to Affirm’s legal department describing, very calmly, that Affirm has, apparently knowingly, threatened to send a report to a credit reporting agency despite the fact that Affirm is aware that no actual unpaid debt exists, and that, should this actually occur, you may seek to recover damages under the FCRA.
I don’t like doing it, but that works pretty well to get things moving.
Credit cards already give you a 30-day grace period before purchases start accruing interest. Using Affirm to extend that to 42 days seems inconsequential.
It seems like their target customer are people bad with credit, which would make them predatory.
Admittedly this is not how most people are using Affirm, but it's definitely been useful to me in that way.
You should not simply assume that you have access to more dollars just because inflation is rising. If your prices go up but your income does not, or your income significantly lags (anyone who got a pre-emptive inflation raise let me know, otherwise it always lags), you're paying for today's inflation with dollars from last year.
Does Affirm report paid-off loans to credit agencies?
https://bam.kalzumeus.com/archive/buy-now-pay-later/
Also discussion thread for aforementioned piece: https://news.ycombinator.com/item?id=29841940
You've also seen credit card companies change their offerings to compete with the BNPL model. One of my credit cards has a "plan it" feature for large purchases, which allows you pay it of in a shorter period of time for a lower interest rate and without incurring interest charges on your month-to-month purchases.
For every person using this to their advantage as a credit tool, I bet there are a dozen who are just sinking deeper into their debt quick sand.
Quoting on-demand loan pricing with clearer upfront payment amounts is more intuitive to consumers than “putting it on the credit card”.
Also for bigger purchases, it's better than a credit card. I pay my Amex balance off every month, but during the pandemic I used Affirm to purchase a home gym setup, and paid it over the course of 6 months at a much lower interest rate.
They are definitely not predatory in my view, but I don't have the perspective of a low-income person anymore.
Might as well just go with your bank itself, instead of adding another 3rd party merchant into the mix.
This depends on the timing of your transaction and your statement date. If you purchase something 1 day before your statement date, and you don't pay it off that same day, you will accrue interest.
Asked and answered? Majority of Americans have credit cards. An awful lot still don’t, and have shit financial situations that make getting one pretty hard. This is a widely documented phenomenon.
Agreed about them being predatory. They literally lose money for every person that uses their service in the recommended/correct way, and only make money when someone flubs a payment.
Merchants will pay affirm a large fee for conversion benefits (e.g better a customer pay $700 even if I lose $50 to affirm fees than for them to pay $0 because they got spooked by the price). Affirm gets the fee. They suffer risks from inflation and nonpayment. Hopefully for them one is larger than the other.
Also, after reading this account I would be very hesitant to go through Affirm for anything. Chase seems responsive on the other hand.
For direct merchant/service provider purchases. Different beast than an installment loan, legally speaking. Regardless of Affirm botching things after the loan was paid, I suspect that the party reversing and withholding payment on the loan was taking a contractually and legally indefensible position.
This write up looks like a great argument to just try and work through the system first.
People in the poverty class are concerned with budgeting decisions to reduce their consumption as much as humanly tolerable. Reducing consumption is a game of psychological warfare between your future self and your present self.
The smart financial play is irrelevant to someone who needs to be making budgeting plays. Cheap credit leads to good financial decisions and bad budgeting decisions.
The sad truth is that looking poor in the US is culturally frowned upon, which often drives people to overextend their credit in order to fit in. People are quite often encouraged through advertising to improve their status through consumption in the short term at the expense of the long term. It's heinous, but that's America for you.
I really agree though, buy now pay later seems like a huge fiscal trap. Employment is at will and you have no guarantee about what tomorrow holds so it's good to try and live within your budget whenever possible... this doesn't really go for housing and the like though since those costs are so astronomical you're going to be gambling with debt no matter how long you save first.
This is a right approach. I wish more people know about this.
Not in my experience in NY. Some decades ago in NY, I had a problem cancelling a gym membership within legally specified rights. Got nowhere. Sent a letter to the AG, and suddenly like magic, the clouds parted and the matter was resolved in my favor. MA AG is also very responsive.
The real scumbags often will not pay attention, but any biz that has the slightest interest in being around for the long term will definitely take notice when the AG starts to get involved. It is a hornet's nest you do not want kicked anywhere near you.
Just like with high cashback credit cards, they have large merchant comissions, that in the end have to be covered from the other customers to show only a single price.
I end up subsidizing other customers by a tiny amount, and just wish for regulation to stop this micro-theft.
Chargebacks against Google can cause your Gmail to get banned, chargebacks against Valve can cost you your entire Steam library. It's plausible legal action could reverse these behaviors, but unless you're prepared and funded to go that route, don't do chargebacks.
What I've learned is that the U.S. payments infrastructure is quite far behind, it's complicated, and frankly makes building with it more difficult than it should be.
For example. There's this new (as of like 2017 iirc) payment rail called Real Time Payments. Think "ACH transfer" but in <10 minutes 24/7 instead of 3-5 business days.
It's advertised as 24/7 however banks are actually allowed to go offline from 3am - 6am on Sundays (it may be once a month, memory is a bit fuzzy). So if you initiate a payment to a payee who's bank is offline, the payment is "rejected". So now you have to tell your customer "hey sorry, the payment has been rejected, it's not actually going to be available for a few hours".
Also there's no centralized way to tell when banks are down and as far as I know, there was no system built to track which banks are down and which are not. So if you want to avoid sending payments to a bank that's offline, you need to look at the history of payments to see for recent reject codes, have a direct line of communication with the banks, or use a third party API which probably does one of the prior mentioned things.
There's also some fun (sarcasm) edge cases in the state machine for a payment and there's a state of payments where it's said to be completed but actually the payment is in limbo and hasn't been received.
Remember, this is a payment system that was released in the last 5-10 years. Also, only ~70% of banks are onboarded to this payment rail so you have to look at payment destination routing numbers to validate if it's an option or not.
I mention all of this to try and convey the complexity and difficulty of working with the U.S. payment rails directly. I don't know if charges applies in the same manner, but I bet it's just as complicated.
With that said, this is Affirms bread and butter for their business. They should be aware of these things. Build the tools to enable their support team to do their jobs and help customers.
p.s. can't forget that ACH transfers are built to be done in batches for business hours only. That's a whole other topic.
How true that second claim is and whether Affirm is merely yet another predatory lender, I will leave as an exercise to the reader.
Here's a good deep dive on the BNPL model from Bits About Money: https://bam.kalzumeus.com/archive/buy-now-pay-later/
Kind of glad I was denied now.
A chargeback to Affirm sounds like a bureaucracy nightmare, couldn't the op contact Affirm and get them to chargeback the merchant? Do they have a procedure for this?
That said, Affirm exhibited terrible customer support and for that they should be held accountable.
When a merchant gets a charge disputed, they may not know about the dispute for many days. Then, if the customer lifts the dispute, the banks most often continue to hold the funds, and not release any information to the merchant for 90 days.
It's horrible for merchants and customers.
Then there’s buyers who just use chargebacks as a way to get free stuff. Buyer asks for a refund, seller asks for it back (even offering to pay for shipping), buyer says no and issues a chargeback.
I worked at one indirectly that was part of a major bank.
They used to even have local branches (stores in Wells Fargo parlance).
Citi, Wells, etc so had them back in the day before they were shamed into shutting them down.
Financing small purchases is just bad financial hygiene.
The story of pretty much EVERY startup. What will it take to get these clowns to focus on customer service and properly build out infrastructure? How much is enough fintech recklessness?
Simple: Regulations with teeth.
There's a reason why this kind of service isn't popular in Europe - not just are us Europeans more averse to debt in general and our banking doesn't rely on paper checks (which eliminates payday loan services and other check-associated bullshit), but one of the core benefits that the EU provides to its citizens is consumer protection. The EU parliament doesn't have much else under its authority which is immediately visible to every consumer, so they put in an extra effort to make life in the EU easier.
Affirm is a unicorn and IPO'd in 20221. It has quite a few competitors in the BNPL space like Klarna and Afterpay. So far they all lose a lot of money.
I had a similar experience years ago with Comcast/Xfinity and found many others who did too since. (/VIN-DI-CATION!)
I had a couple cases where in one situation bank and another a business claimed I owed them and it would show up on my credit report. I didn’t pay either.
North ever showed up.
I have, however, seen Affirm's other scummy side -- they have a special 'workflow' with a partnership with Katapult, a lease-to-own provider, where the merchant can take an Affirm denial and push it to Katapult for an even more predatory rent-to-own loan at higher rates.
Then why did you bother using a pay later scheme for a few hundred dollars on some sketch retailer?
This is like the person that chose to walk down a dark alley in a large unfamiliar city and can't believe they got mugged.
To put it another way, if you don't take advantage of 0% APR financing, you are effectively paying a surcharge to not have to deal with the additional complexity/risk of investing/financing/dealing with credit agencies. It's not clear to me at all you are getting your money's worth as a result of paying that higher price.
Fractional reserve banking is slanted to benefit people who take out debt and companies like Affirm allow somebody who may not be in the market for a Home or a Car to leverage their creditworthiness. Not using your available credit is not much different than keeping your cash under your bed instead of in an investment vehicle. People are just responding to the incentives created by central bankers and do bizarre yet rational things like take out loans for things they can afford out of pocket.
Which pays less than 1% APR. Over six weeks. On a purchase of $271. Congratulations, you saved 31¢.
Everything else is based on some imagined harm that might or might not come to you or some other imaginary person at some point in the future.
I used to get worked up about stuff like this but now I ignore it and my credit is pretty much perfect still. My mental state is much improved.
I might be not understanding the situation completely though.
They threatened to report this to a credit rating agency. At any given time it's probably not a big deal assuming 1) you don't need to replace your car or sign a lease or get a personal loan around that time and 2) you know that you can dispute negative marks on your credit report and you know how to do that.
I didn't know how to do that until I had my identity stolen and I'm definitely more credit savvy than most from my cc churning days
Also, credit scores are used now for some job applications. You can’t get some jobs without a good credit score. If you refuse to sign a waiver allowing the potential employer access to your credit score, you forfeit the job. Such jobs are often in the financial sector where employers want to make sure you do not have an incentive to steal.
or 3) it's just a bluff or 4) they do this all the time and the hit is so minimal that it won't even register, because of Affirm's disrepute.
