How to protect your project from investments with a stolen CC?

[Primpy]

We are just before the implementation of crypto and CC gateways for our STO.
We have the KYC in place after the STO sale, by locking invested tokens before the KYC is passed.

We know we can protect ourselves from CC chargebacks by defining the token and delivery well in "terms of purchase". (we can prove we delivered what a buyer was purchasing).

How about if the buyer uses a stolen credit card, and a true owner of the credit card makes a chargeback? Is there any way to protect yourself from such chargebacks?

We think no one will accept a locking period of 6 months on invested tokens (the period in which an individual can make a chargeback).

 

[Pmalek]

As part of your KYC you can request that the investor posts a selfie holding his ID. Obviously he has to look the same as the person on the picture of his ID.
From the ID you can see his name, compare that name with the name on the credit card he paid with and if they are different don't issue the tokens to that person until he offers you an explanation.   

[theyoungmillionaire]

Aside from IDs, you can ask for proof of billing (within 3months), much better if it is the exact credit card bill that the investor wants to use on your token sale. In addition, you may ask the investors if they are paying via a debit to account, if yes, please provide your bank statement together with your selfie (holding the proof of billing and/or bank statement, must be clear). You can also have some disclaimer stating that: In case of stolen credit card we are not accountable on any chargeback and/or any charge that may arise, you are responsible on what you have entered, check yes if you agree, or no if you don’t agree and f*ck off (only without the F.O word).

[sheenshane]

snip-
..or no if you don’t agree and f*ck off (only without the F.O word).

Laughing out loud with your funny reply yet with sense reply. I can not believe that you have that kind of humor in you @theyoung or ain't custom with it?

As what the above replies, I can say you are going to have some team or lawyer that will help you on arraigning things, or a consultant that will help you with it.

-still LOL @theyoung reply.  

[HCP]

How about if the buyer uses a stolen credit card, and a true owner of the credit card makes a chargeback? Is there any way to protect yourself from such chargebacks?

In short... No. If someone gets past all your KYC attempts with a stolen card, and the true owner makes a chargeback, you'll lose. It is the same with "bricks and mortar" stores. The CC companies pass all the "liability" onto the merchants.

Your options are to be VERY strict with the vetting of credit card investors (full KYC including selfies with custom messages and holding ID etc), or simply don't allow people to use CC's to invest and insist on Crypto (or other non-chargeback) payments only.

[Velkro]

How about if the buyer uses a stolen credit card, and a true owner of the credit card makes a chargeback? Is there any way to protect yourself from such chargebacks?

In short... No. If someone gets past all your KYC attempts with a stolen card, and the true owner makes a chargeback, you'll lose.

Your options are to be VERY strict with the vetting of credit card investors (full KYC including selfies with custom messages and holding ID etc), or simply don't allow people to use CC's to invest and insist on Crypto (or other non-chargeback) payments only.

Yup there is no way of protecting from that. One solution is to not accept credit cards in the first place. Maybe its your market customer favorite form of payment, then it can be very tricky but maybe needed? For example most of bitcoin world ditched paypal because of chargebacks frauds.

[Primpy]

How about if the buyer uses a stolen credit card, and a true owner of the credit card makes a chargeback? Is there any way to protect yourself from such chargebacks?

In short... No. If someone gets past all your KYC attempts with a stolen card, and the true owner makes a chargeback, you'll lose. It is the same with "bricks and mortar" stores. The CC companies pass all the "liability" onto the merchants.

Your options are to be VERY strict with the vetting of credit card investors (full KYC including selfies with custom messages and holding ID etc), or simply don't allow people to use CC's to invest and insist on Crypto (or other non-chargeback) payments only.

The thing is, we will run KYC only after the sale (if Maltese regulators give us the green light), and until investors successfully pass the KYC their tokens will be locked.
By Maltese regulations, KYC must occur before any transaction is completed. We object the regulators by stating that for us the transaction is not completed until tokens are locked. Atm, our lawyers are waiting for their official response.

Why did we decide for the KYC after the investment?
With it, we pay KYC service provider (Trulioo) only for KYC checks of people that invested, and not for all the people that might invest, as if we have done it before investing.

Regarding CC payments we are juggling these options:
- listing on an exchange only 6 months after the sale completion (in this way if a chargeback occurs, we can still hold on to the tokens)
- exclude CC for good
- find out any other viable way to protect ourselves and accept them