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Unhappy customers, retailers take swipes at each other

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SALT LAKE CITY — Customers racked up $11.8 billion in "charge backs" in 2009 by bypassing customer service at businesses and complaining directly to their credit card companies about faulty merchandise, items that didn't arrive and purchases that were not as advertised.

Not a few of them, it's believed, did so fraudulently.

Now retailers are fighting back with a so-called "black list" database that names customers who made charge backs.

And the debate's becoming heated, as consumer privacy advocates and retailers air their different views of that database, Badcustomer.com, which now has 15 million records.

Brien Heideman got the idea for the company, where he serves as president, when he was a retailer selling products online.

"What was happening with the economy getting tighter and tighter was we saw more and more charge backs. That typically happens when someone orders something online and either didn't receive it or just doesn't want to pay for it," said the St. George native, who now lives in California, where BadCustomer.com is headquartered.

Besides having to refund the purchase price, companies can be penalized by the credit card company. It's costly for retailers, Heideman said.

Enter BadCustomer.com, which keeps a database that retailers can access for free, flagging customers who do charge backs. When someone orders online and the transaction is being rung up, the computer "pings" the database, running the name, then can choose to decline the transaction if a customer is listed there. That may be the first the customer hears about being on the database. He's also told who to contact from BadCustomer.com to get his name removed from the list.

Initially, BadCustomer said it would remove someone from its list for $99, but that drew a lot of fire from critics. The company now offers in-house mediation to try to resolve issues quickly and at no charge.

But the whole practice of listing customers on a database that can affect their ability to conduct business, especially without telling them, has drawn the ire of consumer advocates, including the Privacy Rights Clearing House.

Many customers have a charge back because the complaint was legitimate, the group said. The database doesn't distinguish.

Critics also say it's unfair to hold against a customer a right to which he's entitled. Charge backs were created to protect customers from shoddy merchandise and lousy business practices.

Heideman said most merchants still take the sale, but might take extra steps, like using e-mail to verify shipping addresses and to provide shipment confirmation.

More information is online at badcustomer.com.

e-mail: lois@desnews.com