Regulator Overturns the Bank and Orders a Full Chargeback

Case Study: Regulator Overturns the Bank and Orders a Full Chargeback

This case involved the following MyChargeBack services: legal demand letters and a financial regulatory complaint.

The Basis for the Dispute

For W.S., a New Zealand retiree, it all began in 2017, the year in which the price of a bitcoin shot up dramatically from $1,100 to almost $20,000. The sudden rise of the world’s first cryptocurrency dominated the headlines and encouraged her to look into investing her own funds. With her husband’s consent, she wanted their savings to grow in order to purchase a home for her son, then in his thirties. The newspapers were full of stories about how bitcoin’s early investors had become millionaires virtually overnight, so she decided to give online trading a try.

She surfed the internet and found a site that provided her with a lot of facts about how to purchase bitcoin, so she filled in its online form for more information. Within a few days W.S. was called from a British phone number by someone who introduced himself as “George,” and said he was the “Senior Advisor in Gold and Diamond Sales” at the company whose website she had visited. 

Initially, W.S. had some doubts. “George” was fluent in English, but he didn’t speak with  a typical British accent even though he said his company was based in London. And then, the day before Prince Harry married Meghan Markle, W.S. asked him about it but he appeared to have no idea at all what she was talking about. That really made her wonder. It was front page news in Britain (and much of the rest of the world too). How could anyone in London not know?

Both “George” and an associate of his who called himself “Dan” continued to call her to pitch their company until W.S. had to enter a  hospital for minor surgery. Upon returning home, she found flowers on her doorstep that he sent, along with his best wishes to get well soon. She was appreciative, of course, and the thoughtfulness convinced her that “George” was someone whom she could trust, and told him the next time they spoke that she was ready to invest.

While he claimed his company had the ability to offer digital currencies like bitcoin, “George” instead told W.S. that her money would be deposited in her own “trading account” and be invested in the stock market in order to be assured of a high rate of profits. 

To begin, “George” asked W.S. in writing to send him a six-figure deposit by bank wire, which she agreed to do in three installments. Her bank actually expressed reservations about her request to send the first to the bank in Hong Kong, but she proceeded anyway. The second wire went unimpeded to a bank in Hungary, but curiously, the Hungarian bank would soon afterwards freeze the recipient account. And then, her bank refused outright to process the third wire, which was supposed to have gone to a bank in Slovakia. 

It was then that W.S. realized that something was terribly wrong. So she spoke with a lawyer, who advised her to go to the local police, which in turn referred her to an Interpol official in Wellington, the country’s capital. But apart from listening, there was nothing that Interpol claimed it could do. So, a year after her saga began, W.S. surfed the internet again but this time found MyChargeBack.   

Strategies and Tactics

MyChargeBack immediately corroborated what W.S. suspected ― that the purported trading firm that she had engaged with was a fraud. It had no license to operate, and its online trading platform did not execute any purchase of digital currency or any other asset because it was not connected to any recognized exchanges. It was manipulated by the merchant to exhibit whatever figures it chose to. market. Moreover, the “trading account” that W.S. was promised that would be opened in her name never existed. Her money instead flowed into the company’s coffers. In short, the so-called “brokerage” left a trail of victims who lost a significant amount of money.

Together with its network of attorneys and investigators in Central Europe, MyChargeBack was also able to establish that the merchant funneled our client’s funds through a legitimate business entity in order to conceal the true origin of the transaction. In so doing, the so-called “brokerage” laundered the proceeds, bypassed fraud detection screening and embezzled our client’s funds. All of this, of course, was accomplished in violation of the law, since the beneficiary did not hold a valid trading license. The attorneys, therefore, petitioned the banks to return our client’s funds.

The case took four years to resolve, and that, at times, was depressing. Those were four years when she and her husband had no interest income on the funds she originally thought she had invested. But it turned out that the wait was worth it. We appealed to a financial regulator and the police and they ultimately agreed with our arguments and ordered the banks to provide W.S. with a chargeback for the entire amount she contested, plus 8% interest and an additional £200 as compensation for the inconvenience — over $300,000 in total.

The MyChargeBack Difference

A scammer with a UK phone number, banks in Hong Kong, Hungary and Slovakia, and a client in New Zealand. Truly a global case. What made MyChargeBack the ideal choice for taking on an assignment as complicated as this, therefore, was its global presence, combined with our commitment to invest 100% of our effort in every case we accept, no matter how long it will take, and no matter the outcome.

Not only did MyChargeBack have experience in dealing with each of the banks involved, but it also works in tandem with a network of attorneys around the world who specialize in consumer law. We turned to our legal team in Budapest. “The lawyer in Budapest was absolutely brilliant,” W.S. told us afterwards. We agree.

MyChargeBack in New Zealand

  • The client wanted to invest in bitcoin and sent a six-figure deposit via three separate bank wires to what turned out to be an unregulated investment firm
  • Upon discerning that the people she was dealing with were imposters, she consulted with a lawyer who directed her to law enforcement, but that did not yield any results
  • Working through its network of attorneys and investigators who specialize in such cases, MyChargeBack was able to prove to the police that the firm was operating illegally and laundering money
  • Ultimately, police ordered the banks to provide a chargeback for the entire contested amount plus 8% interest and an additional £200 as compensation

Case settled by a government agency

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Payment made by the bank

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