Consumer complaint received 2019-03-20
Company: Square Inc
State: GA
Product: Money transfer, virtual currency, or money service
Sub-product: Mobile or digital wallet
Issue: Unauthorized transactions or other transaction problem

Complaint:
I am a XXXX XXXX and have been doing XXXX work for 25 years. I've never run into a situation like this before but long story short, I was hired to do a XXXX XXXX job for approximately {$4500.00}. 

I was paid {$4000.00} as a down payment with the transaction being processed through square. 

XXXX : XXXX Receipt Number : # XXXX The transaction was successfully processed, at which point two days later the funds were auto transferred to my checking account in the amount of {$3800.00} Square took out a processing fee of {$140.00} This part is normal and expected, however, after funds were secured, the customer attempted to do a chargeback fraud scheme against these funds and I declined to participate in this scam, instead withholding the money this person paid as a down payment on the site as payment for services rendered since I had done what I was hired to do - build a website. 

This person then disputed the charges, saying they did not recognize the charge. No matter how I look at it, at this point, the charge was fraudulent. Either the cardholder is trying to do a chargeback scheme, or someone got someone else 's credit card number and is trying to pull this stunt. Either way it's obviously fraud at this point. 

It was decided in the cardholders favor to revert the funds back to their account. Square withdrew  {$4000.00} from my account in response to this dispute and subsequently handed these funds over to the credit card bank. 

However, Square did not revert the service fee charged against this transaction. It has been my experience that this is NOT normal. For example, XXXX will revert service fees in cases like this. 

Therefore, Square is knowingly participating in collecting funds off fraudulent transactions and making the merchant ( me, in this case ), pay the service fee on behalf of Square, so Square can still pocket the fraudulent funds they made off the service fee. 

In other words, I received a {$4000.00} payment. {$3800.00} was deposited into my account, so Square pocketed {$140.00} as a service fee. Now, both Square and I have money from a fraudulent charge.

Square made me pay {$4000.00} back on that fraudulent charge, and they still kept the {$140.00} off the fraud charge, making me pay that extra {$140.00} on their behalf so they can keep a portion of the funds received from a fraudulent charge. So now, I've paid back the money from the fraud charges so I no longer have fraudulent money. However, Square still has {$140.00} from this fraudulent transaction, so they are knowingly keeping fraud money and making the victim of this fraud ( me ) pay the {$140.00} of fraud money back on their behalf. 

Is it even legal for a company to knowingly keep funds and profit from a fraudulent charge? Because this is exactly what they are doing. The {$140.00} of the fraud money they're still pocketing, and making me pay back that money on their behalf so they can keep their part of the fraud money. That seems really shady and illegal to me.

Company response to consumer: Closed with explanation