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Credit card purchases aren't foolproof, for buyers or sellers

Art Pressman sold a piece from his collection to someone who used an American Express card. After the buyer took possession of the art, he disputed the charge and kept the art, leaving Pressman without the money and his work.

JIM DAMASKE | Times

Art Pressman sold a piece from his collection to someone who used an American Express card. After the buyer took possession of the art, he disputed the charge and kept the art, leaving Pressman without the money and his work.

Among the many suggestions for consumers and small-time merchants to protect themselves is to use (or accept) a credit card.

That goes for PayPal and eBay transactions as well as for the mom-and-pop businesses to process purchases.

It's supposed to help you avoid falling prey to scams and losing money because you can always dispute the charge to avoid getting stuck with bogus or nonexistent merchandise. Meanwhile, merchants enjoy the protection of the money backed by the credit card company.

But with countless personal and small transactions nowadays, scams and bad deals abound, with the victims including consumers and merchants alike.

Art Pressman of Safety Harbor lost $750 and a painting.

Pressman, an artist whose work was recently on display at a Westin Hotel in Tampa, sold one of his paintings to a consumer named Ray Sharkey. Sharkey used a credit card to buy the $750 painting of an image of Michael Jackson.

Pressman called in the $750 charge to American Express via his merchant account and it was approved.

But a week later, Pressman says, the consumer disputed the charge and American Express pulled the money back from the artist's merchant account.

He was left with no money and one less painting.

Pressman called police in Hillsborough and Pinellas, and filed a complaint with Federal Trade Commission as he became unnerved by it all.

"I'm not going to deal with credit cards any more, ever," Pressman said with frustration in his voice.

The case struck me because similar issues can arise for individual consumers who sell or receive products online via PayPal and similar payment services. If someone disputes the charge, consumers or the merchants can lose the product and the money, just as Pressman did.

The case highlighted the need for an abundance of caution in regard to those with whom we do business.

With the exception of a major retailer such as Walmart, Target, etc., it's important to know or carefully research who you're dealing with before surrendering merchandise or money.

"It's coming down to, 'You've got to do business with people you know,' " said Deborah Berry of the Pinellas County Department of Justice and Community Services.

That's tough nowadays when many transactions occur in cyberspace rather than in person. So unless you're doing business with or as an established retailer or with someone you know, Berry offers this warning, in particular for purchases online:

"I wouldn't buy anything that I couldn't afford to lose the money on," she said.

Bill Hardekopf of Lowcards.com, which provides information about the credit card industry, says Pressman's case is "a very complicated situation for the painter."

The Fair Credit Billing Act offers a variety of protections for the consumer that can be instructive for anyone on either side of a dispute over a transaction. But the key is to do some homework.

So here's the Edge, courtesy of Lowcards.com:

• If the debt is correct, the consumer must be told promptly and in writing how much is owed and why. If the consumer disagrees, they may write the creditor within 10 days of receiving the explanation of the debt.

• If the debt is incorrect, the creditor must explain in writing the corrections that will be made and credit the consumer's account by removing all finance charges, late fees or other charges related to the error. If it is determined the consumer owes a portion of the disputed charge, the creditor must send the payment demand in writing.

Ivan Penn can be reached at ipenn@sptimes.com or (727) 892-2332. Follow him on Twitter at www.twitter.com/Consumers_Edge and find Consumer's Edge on Facebook.

Credit card purchases aren't foolproof, for buyers or sellers 05/28/10 [Last modified: Friday, May 28, 2010 10:10pm]
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