Chargebacks911 Moves Court for Leave to Reply to New FTC Allegations

Defendant Chargebacks911 and Gary Cardone and Monica Eaton, owners of parent company Global E-Trading, moved the court for leave to reply to the FTC’s opposition to their motion to dismiss, said their unopposed Wednesday motion (docket 8:23-cv-00796) in U.S. District Court for Middle Florida in Tampa, requesting an opportunity to address allegations raised by the FTC and the state of Florida “for the first time” in their opposition. Plaintiffs “mischaracterize the arguments” in defendants’ amended motion to dismiss with regard to “causation and the need for substantial consumer harm and rely on inapposite case law,” said the motion. Plaintiffs also assert new allegations about defendants’ alleged “scheme” and the “likelihood” of harm to consumers, “seeking to obscure the Complaint’s glaring omission that it does not identify or even allege in non-conclusory fashion that Defendants’ alleged conduct harmed a single customer,” said the motion. Defendants don’t seek to restate arguments in the motion to dismiss but to address the “re-formulated allegations and case law introduced” in the opposition, they said. The April complaint (see 2304130013) alleges Chargebacks911 allowed its clients to run “microtransactions” via prepaid debit cards that artificially lower a merchant’s overall chargeback rate by inflating the total number of transactions running through the merchant’s account, thus lowering the percentage of their charges that were disputed by consumers. Excessive chargebacks are a primary indicator a merchant is engaged in fraudulent, illegal or unauthorized practices; a higher percentage could lead to more scrutiny, the complaint says.