Credit card scams are a headache, not only for customers, but also the merchants who were unfortunate enough to charge the credit card in the first place. Credit card scam victims can simply (or maybe not so simply) ask their banks to issue chargebacks, forcing merchants to eat the costs. For videogame publishers, who've been on the receiving end of a chargeback, eating the costs of a chargeback, though painful, aren't too devastating. However, for an indie developer that isn't working on a budget of millions of dollars, chargebacks can be a bit of a problem.
Unknown Worlds Entertainment, the developers behind Natural Selection 2, was out $30,000 after it was discovered that 1,341 Steam keys of the game were purchased illegally with stolen credit cards. The real credit card owners, seeing the fraudulent charges, issued chargebacks for the keys.
Apparently, someone had used the stolen credit cards to purchase these keys off the Unknown Worlds store and then sold them to third parties at a discount. For now, Unknown Worlds has closed its store, though Natural Selection 2 keys are still purchasable via Steam.
Unknown Worlds has stated that any users who were apart of the scam should contact them for a refund, though it seems unlikely that the developer would refund money to users who didn't buy from a legitimate source in the first place.
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What kind of asshole does this to an indie developer? That's lower than low.Reply
NS2 is a great game, a labor of love. It's so heartbreaking to see this happen to devs that really don't deserve it. Do it to EA.
While I don't want to see this happen to anybody, let alone an Indie developer, this is hardly the same kind of loss that a retailer who sells hard goods would face. A retailer selling tangible items would be out the money and the item, a real loss. In this guys case, a software key was sold, something that has little to no cost to replace. Since it's pretty straight forward to track the keys associated with the fraudulent purchases and revoke them, I don't really see anything but a headache and a serious disappointment to the developer and the gamer's who purchased stolen goods. Calling it a $30,000 loss is stretching it here, as it was $30,000 he never would have had anyway. A sad situation, but also one in need of perspective.Reply
It really disheartens me to read that this sort of thing goes on. Why didn't the scumbag do it to EA or Activision instead? Purposefully targeting a small company, knowing that they can get away with it. Bad bad people.Reply
To those saying they lost nothing you are dead wrong. I had written out a long explanation about why this absolutely has cost them a lot of money but it got lost when I tried to login so here goes again.Reply
Chargebacks cost money, the charge is passed on from the payment processor to the seller, this fee can be anywhere from $15 to $30 depending on the institution that the chargeback originates from, amount of chargebacks and the payment processor being used.
So multiply 1341 by $25 (which, sadly, is a very realistic figure for a chargeback fee) and you get ~$33k in chargeback fees alone. Then factor in the server costs for serving these customers then the support costs, believe it or not users need lots of support for the simplest of things, and you are easily at the $30k figure of LOSSES.
I know some people like to live in a fairytale world where developers all work for free and a digital product is not worth anything but believe it or not support costs lots of money, it takes money to server customers in the first place, it costs a hell of a lot of time and money to get the product out there in the first place. Chagebacks are an unnecessary cost that is incurred on top of the refund so they do cost the company.
1341 chargebacks would be enough to sink most small companies so it is not just a simple case of kill the accounts. Things in the real world cost money, setting up an account costs money, providing support to those that cannot evenfigure out what is right in front of them costs much more money than most realise, killing an account costs money but most of all the chargebacks themselves cost a hell of a lot of money.
ALso I forgot to point out that these users were paying customers at one point, just not to the devs so the devs have had to swallow the loss in chargeback fees plus lose 1341 customers that more than likely lots of would have bought from them in the first place had these scammers not have been able to screw them over.Reply
It would be a very easy case to make that a majority (admittedly not all or most but definitely a majority) of these 1341 users would have bought from steam if that were the only option. So on top of the actual monetary losses incurred from the whole chargeback process and supporting non paying customers they have lost out on probably ~1k in sales.
Every little thing costs money in business and this is one of those non-debatable huge losses for this company, I just wish them the best and hope that things like this do not happen very frequently in the future and that they don't get hit like this again.
"it seems unlikely that the developer would refund money to users who didn't buy from a legitimate source in the first place"Reply
Which is exactly why they have a huge number of chargebacks. Customers hate chargebacks as much as vendors, so the fact that they've been forced to do so is probably a sign that the developer isn't behaving properly. They're lucky they aren't also being hit with BBB complaints and small claims lawsuits, which would hurt even worse.
$5 says valve will come to save the day in some way.Reply
Customers hate chargebacks as much as vendors, so the fact that they've been forced to do so is probably a sign that the developer isn't behaving properly. They're lucky they aren't also being hit with BBB complaints and small claims lawsuits, which would hurt even worse.
Sadly this isn't true.
This is a sign that the credit card companies are out of control. They charge outrageous fees (5% + a base fee), make it a breach of contract to ask for a customer's info or ID (really), and then the merchant is still on the hook for any charge-backs or fraud. Even if you win a charge-back you still get hit with a huge $25-$35 fee. Charge-backs should be harder. There are people who use charge-backs when they're not happy with something and the charge-back still goes through no matter how illegitimate the charge-back is. I truly feel for the devs.
Achoo22"it seems unlikely that the developer would refund money to users who didn't buy from a legitimate source in the first place"Which is exactly why they have a huge number of chargebacks. Customers hate chargebacks as much as vendors, so the fact that they've been forced to do so is probably a sign that the developer isn't behaving properly. They're lucky they aren't also being hit with BBB complaints and small claims lawsuits, which would hurt even worse.Reply
Sorry, but you are way off base. The charge-backs are from people with stolen credit-cards who didn't buy the game themselves.
A customer who bought an illegitimate steam key from an unscrupulous source has no right to a refund from the game developer who didn't sell them anything; I feel a bit bad for the end-buyers who's keys are getting canceled, but their issue is with the reseller they bought from, not the developer.
The only thing the devs may have done wrong is likely hosting a store with poor botting checks and/or poor fraud detection. Sadly, this is going to make it harder for indy devs to sell their own product; hopefully the CC companies can be negotiated with, but I doubt it.
NS and NS2 are great... I really don't understand why some ppl like to hit the little guy, myabe thats the only they feel like a man or something, sometimes I feel sorry for thoese people, otehr times I just wanna PUNCH THEM in the face! -.-Reply