Comment by kyrra
5 hours ago
Prepaid credit cards tend to be a very common fraud vector (very similar to gift card scams).
For chargebacks, the merchant has to pay at least a $15 fee on every chargeback, regardless of the outcome of the result. It's why many merchants prefer for you to contact them and ask for a refund rather than going through the chargeback process. For small purchases, merchants tend to just refund rather than dealing with an angry customer that's going to charge back.
On the other hand, prepaid credit cards seem to be one of the only ways to prevent merchants from "running up" the charges on a customers account. Sure, a customer can go through the dispute process but it's quite a hassle. Just "limiting the amount of money you place on the table" is quite effective. Giving a merchant your credit card with say a $5,000 or more available balance seems like insanity, like laying out 50 of $100 bills on the table: "here, go ahead, can I trust you to take only what you should" ? I would pay extra to have a VISA or MC credit card that only offers say a $200 limit, just for dubious situations, but again, providers have a "conflict of interest" in that they only make their "cut" when the charges go through, so the more and the larger the charges - - the more "cut" they obtain.
A prepaid card doesn't prevent you from being liable for a bill. This is like how leaving your wallet at home when you visit a resteraunt doesn't entitle you to free food because they don't charge you up front.
No but it significantly raises the effort for collecting said money. The company would need to have a strong case (that they need to be able to defend in court if necessary) to do it.
No scummy company relying on dark patterns/etc to charge the customer without their consent will dare potentially airing this dirty laundry in front of a judge.
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