The complaint specifically alleges that the defendants’ primary role in the scheme was to help Keto marketers evade financial scrutiny and potential repercussions from credit card processors by artificially manipulating merchant chargeback ratios. Chargebacks, consumer-initiated requests to reverse credit card charges, typically alert banks and credit card companies to potential fraud or dissatisfaction. A high chargeback ratio can trigger audits, penalties, or even suspension of payment processing capabilities, severely impacting a business’s operations.
The plaintiffs claim that Chargebacks911 used manipulative practices to hide the real extent of chargebacks, which are disputed customer payments. According to the lawsuit, the company allegedly created a large number of small, meaningless transactions, like selling $0.99 e-books. These transactions were often fake or arranged through other companies. By increasing the total number of transactions, the high number of actual chargebacks—caused by things like unauthorized charges or misleading marketing—was made to seem less significant in comparison.
