Common use of Fraud Chargeback Exception Clause in Contracts

Fraud Chargeback Exception. Notwithstanding anything to the contrary in Section 6.1, but subject to the limitation set forth in Section 6.2(b), HSBC and Merchant agree that where Merchant follows the terms and procedures and provides the information set forth below, except as provided in Section 5.4, HSBC may only chargeback the portion of the Card Sale or Sales Slip which is reasonably determined by HSBC to be the result of customer fraud that is equivalent to 50% of the Card Sale or Sales Slip. The liability of HSBC for all chargebacks is limited to an amount equivalent to 1% of annual Net Card Sales. (a) Merchant shall have complied with Sections 5.4(a) through 5.4(h) with respect to the transaction in question. (b) Within fifteen (15) Business Days of receipt of HSBC’s request, or such earlier time as may be required by HSBC, Merchant shall provide to HSBC a copy of the signed application, signed Sales Slip, and, if the Goods are shipped, signed delivery receipt, and the signature on the application matches the signatures on the Sales Slip and, if the Goods are shipped, delivery receipt. (c) For Card Sales made to a Cardholder on the telephone or through the Internet, Merchant shall not have shipped for 24 hours after an approval to allow HSBC time to notify Merchant of suspected fraud after any appropriate fraud checks. (d) Merchant shall not have shipped to an address other than the billing address. (e) If Merchant has not yet shipped Goods, Merchant shall stop shipment when HSBC notifies Merchant that the transaction is suspected fraud.