Rallying Vendors Affected by Digital River Payment Issues for a Class Action Lawsuit

[OliverDocklight]

(1*) made edits to clarify wording. The process is "Refund". (no chargeback involved).
============

Here is the state of affairs as German business with extremely longstanding vendor account (1*) with shareit/DR/MyCommerce in Germany:

As so many others maybe, we unfortunately didn't go to full alarm mode after the first delay and all we can do is try to do damage control. Here is what we decided to do and how we communicate:
www.docklightnews.blogspot.com/2024/10/ ... merce.html

So:
- Yes, we decided to issue cancellation/"Entire Order Refunds" (*1) via mycommerce for the bulk of the orders (*1) for the affected period. First the larger transactions, now down to the small single licenses.(*1)
- For us it's customers first and we grant them continued use of the license key already out, even if we will never be able to back this up with a payment.

Our clients confirm they receive the mycommerce cancellation notices, but from our side we still have to hear that the client sees the refund on his side.

Here are the steps that we as a German business initiated:
- Immediately issued a "Mahnung" / Payment Reminder referring to outstanding payments according to the MyCommerce payment notes that were issued but not payed out. We fully ignore the new "auto signed" agreement. I don't know if it's helpful / if translation to English can help, but these would be some official ressources that describe the process in Germany:
www.ihk-muenchen.de/de/Service/Recht-un ... eiben.html
www.ihk-muenchen.de/recht/vertragsrecht ... rchsetzen/

[OliverDocklight]

Another issue we try to clarify:
* Digital River GmbH in their "Gutschrift" still uses the Cologne address, but their business address has been moved to Frankfurt in 2020 (and moved again within Frankfurt in 2022 to Wiesenhüttenstraße 11, 60329 Frankfurt am Main). There seems to be no change in the "Stammkapital" - share capital up to which the GmbH is liable. This is publicly available information at the official German business register at www.unternehmensregister.de

[HSchoenb]

Count me in.
It will be 20tsd at the end of this month.

[Gekkolives]

well here we are - bonded by such a miserable event, my commiserations and best wishes to all those who have it would appear fallen foul of some fairly unscrupulous and unprincipled people.

We have also been hit by this dubious crowd that have taken over what for a very long time was an excellent partner who we have been loyal to for well over 20 years as have many others - our losses to date amount to almost a $1 million and whilst that's more than most - it is academic how much we have all lost - everything is relative and for some of us here $5-10,000 will hurt just as much I am sure.

Our story is fairly similar - we were last paid in early August after several weeks of erratic payments and then were told by staff we would revert to weekly payments shortly - we held on for another 3 weeks and due to no payments being received and totally contradictory statements by different staff at DR/MYCommerce - eventually pulled the plug just before the end of August.

Somewhat ironically a few weeks later we received official notice from DR that our account had been terminated and they would be holding on to all sums outstanding (almost $1 million) for a further 6 months to settle potential Refund/Chargeback claims - typically we might see $10-20,000 annually !

We are in discussions with lawyers but now I see the scale of the problems from others here - clearly DR will not in my opinion be trading very much longer so I am not optimistic at recovering our money.

But my big question - is where are MasterCard and Visa in all this - how have they not stepped in and stopped this shower from operating and also put some sort of action in place to safeguard theirs and clients money ?

I'll continue to monitor with interest - but I do not have high hopes of any truly significantly beneficial outcome at this moment in time.

[pekbro]

Well aside from all this crap with DR, im at least surprised and impressed by how much you all are supposed to be earning. Seems
like more than i would have guessed, when
everything is working as intended.

[grujicd]

But you also saw that many started 15 or 20+ years ago. Sadly, my revenue through years is more a sinus function than hockeystick chart

[whatamess]

- Yes, we decided to issue cancellation/chargebacks via mycommerce for the bulk of the orders. First the larger translations, now down to the small single licenses, even if we have to consider the chargeback fee.

Maybe this will be of help to you: You have a conceptual mixup here I think. You do refunds. Chargebacks are forcefully invoked by users through their credit card company, e. g. if they think the transaction was unwarranted. Only for the latter the now USD20 chargeback fee applies. It does not apply to refunds!

It is possible that DR can later claim their like 6% margin even on refunded transactions but let them come. In our opinion they brough the need for license revocation and refunds on themselves by breaking contract for the July payments. I'd be surprised if they lived long enough to charge anything and frankly if a business can survive a missing 100K what is a risk of 6K in margin, especially if we expect more than 6% of refunded users to re-purchase. Well, that scales to any size of missing $K...

[whatamess]

im at least surprised and impressed by how much you all are supposed to be earning. Seems
like more than i would have guessed

This is off topic... But it is so common that folks take turn around for earnings that I'd like to comment on it anyway. Many here are small corporations like Ltds. or GmbHs themselves, they have an office, they have some employees, they pay social securities for them, they pay taxes, they need accountants, freelancers and whatnot. And even the individual developer has cost and after deducting said cost he most often pays 50% of what's left for taxes and health insurance etc. And that does not even begin to fathom net VS: gross earnings and VAT in 27 EU countries and taxes in other jurisdictions of the globe. There is a reason many want an MoR to take some of that complexity away. Things are not as much of a paradise as they might look on first glace. People work hard and some actually are endagered to be drawn into the downward draft of this up to failure of their business.

[pekbro]

im at least surprised and impressed by how much you all are supposed to be earning. Seems
like more than i would have guessed

This is off topic... But it is so common that folks take turn around for earnings that I'd like to comment on it anyway. Many here are small corporations like Ltds. or GmbHs themselves, they have an office, they have some employees, they pay social securities for them, they pay taxes, they need accountants, freelancers and whatnot. And even the individual developer has cost and after deducting said cost he most often pays 50% of what's left for taxes and health insurance etc. And that does not even begin to fathom net VS: gross earnings and VAT in 27 EU countries and taxes in other jurisdictions of the globe. There is a reason many want an MoR to take some of that complexity away. Things are not as much of a paradise as they might look on first glace. People work hard and some actually are endagered to be drawn into the downward draft of this up to failure of their business.

I get it, wasnt trying to cast any shadows or anything. Personally, i would hope you folks
are doing well, thats good for everyone i would hope.

In any event, whatever you make is more than i have ever made from music, since
my total stands at zero $, after 40 yrs of
pursuing it as a hobby. Still, i support
many devs and vendors with my income.

I for one appreciate your efforts, even
tho it is really only a drain on my finances.
it makes me happy tho.

[grujicd]

Oh, not all devs here are in music business, we gathered here by accident because this was more or less the first place where Digital River problem was discussed, and we tagged along.
And we too love to spend money on music gear or software for hobby, music is one of the best things in life!

[sft234]

We have also been hit by this dubious crowd that have taken over what for a very long time was an excellent partner who we have been loyal to for well over 20 years as have many others - our losses to date amount to almost a $1 million

Boah - at least good to know it's not only small fish concerned...

[OliverDocklight]

Maybe this will be of help to you: You have a conceptual mixup here I think. You do refunds. Chargebacks are forcefully invoked by users through their credit card company, e. g. if they think the transaction was unwarranted. Only for the latter the now USD20 chargeback fee applies. It does not apply to refunds!

Many thanks for the extra advice and clarification! A very good point and I would indeed agree with you and we corrected the wording in our communication already. There was a lot of discussion here and at LinkedIn about the chargeback fee, so that's why I probably made that mixup. If there is indeed no chargeback fee via the credit card company involved (frankly, we have to check), all the better!

Here is what this also shows - in 22 years we've been doing this we rarely ever were asked for cancelation/refunds, and we always confirmed any cancellation request immediately. Not a single question asked. In these singular instances it was many times us who offered - look, if you are not happy with how the software works for you, we will just refund, not a problem at all. We simply never has any significant percentage of refunds to do and this probably explains why I would not even know the English terminology correctly.

So, really, I much appreciate that you pointed this out, because it is important to us that the wording is correct.

Oliver

[Pastmaster]

I'm also affected and I have two questions for your guys who already had some time dealing with this:

a) Refunds: Did anybody receive confirmations from their customers these went through? If so how many?

b) If they do not get through wouldn't it make more sense to ask the customers to initiate charge backs. Digital River should not be able to deny those. Let them charge 20$ per refund and put it on the tab so I can at least fight that one when they try to cash it in.

p.s. I wonder if it makes sense to contact the credit card companies directly with a goal of them blanket reversing all those transactions. Probably difficult legally but maybe somebody can chip in on if that is an option.

[DR_byteplant]

AUTO-ADMIN: Non-MP3, WAV, OGG, SoundCloud, YouTube, Vimeo, Twitter and Facebook links in this post have been protected automatically. Once the member reaches 5 posts the links will function as normal.

We at Byteplant have been using DR for 20+ years. Like all of you, we have not been paid since July.

We are already working with a law firm in Cologne, Germany to take legal action against DR and their executive team (Strafanzeige, Insolvenzantrag etc.).

To get the law enforcement authorities here in Germany moving, we now need your help to collect as much evidence as possible - so we need everybody here to join in and send your company and contact details along with any unpaid sales reports you can provide to dr@byteplant.com (mailto:dr@byteplant.com).
Everything you send will of course be treated confidentially and only be used in the context of the legal proceedings.

Remember: If we all stand together now and act fast to collect documentation for as many cases as possible, the better our chances are to get the authorities to do their work and hopefully help us to recover the money for all of us.

[OliverDocklight]

a) Refunds: Did anybody receive confirmations from their customers these went through? If so how many?

We are still checking, but you can read reports in this thread or the second one (Re: Alternatives to ShareIt/MyCommerce/Digital River) that the customer indeed received the refund.

b) If they do not get through wouldn't it make more sense to ask the customers to initiate charge backs. Digital River should not be able to deny those. Let them charge 20$ per refund and put it on the tab so I can at least fight that one when they try to cash it in.

I am by no means qualified for general advice, but here is a very good answer I received because I mixed up the terminology:

In my opinion, refunds are a regular thing and should not be treated in any way as damaging to any party.
Chargebacks on the other hand can harm the merchant account, by introducing fees and getting their merchant account revoked if some threshold is reached. Chargeback should be only used for unauthorized transactions, and this should not be the case. So if you ask your user to ask for chargeback from their bank, there could be damages involved for DR.

We ourselves did NOT consider actual chargebacks at any point. Oliver