For two of the three cases mentioned, I'd tentatively agree, but in that particular user's case they probably are free to keep the money for several months to a year after they freeze the account because she was running a business in a field that has a high chargeback risk.
Someone has to pay for the high level of consumer protection that people who pay with credit cards receive. Every entity that is in the chain between the issuer of the credit card user and the merchant that receives the payment arranges it so that responsibility of this falls on someone farther down the chain than them. There is no one farther down the chain that the merchant, so the merchant ends up being the one who has to pay for chargebacks.
There is nothing further down the chain than the merchant so it ends up on them. But a merchant that ends up incurring a lot of chargebacks often also is a merchant that ends up not having the money to pay for those chargebacks, and in that case the entity that the merchant was dealing with for accepting payments ends up having to pay.
Thus that entity will almost always have in its contract with the merchant that they can keep some of the funds the merchant earns in reserve to cover chargebacks. I doubt any court will find such terms invalid. They have a legitimate purpose of risk mitigation, the companies will have the data and actuarial analysis to show that the amounts held in reserve are reasonable for the level risk, and the ultimate purpose is to support the strong consumer protections that credit cards provide.
> Someone has to pay for the high level of consumer protection that people who pay with credit cards receive.
I, the consumer, does, every step of the way. If I understand their fee structure, Paypal takes about 3.5% of any transaction I make with them. (They show this to the merchant, but any merchant is going to have to consider this part of their costs. Some just directly pass it back to the customer. The point is: they make money from the good transactions, and should plan appropriately to deal with the bad ones. And there is CC & interchange fees, too, at those levels…)
Someone has to pay for the high level of consumer protection that people who pay with credit cards receive. Every entity that is in the chain between the issuer of the credit card user and the merchant that receives the payment arranges it so that responsibility of this falls on someone farther down the chain than them. There is no one farther down the chain that the merchant, so the merchant ends up being the one who has to pay for chargebacks.
There is nothing further down the chain than the merchant so it ends up on them. But a merchant that ends up incurring a lot of chargebacks often also is a merchant that ends up not having the money to pay for those chargebacks, and in that case the entity that the merchant was dealing with for accepting payments ends up having to pay.
Thus that entity will almost always have in its contract with the merchant that they can keep some of the funds the merchant earns in reserve to cover chargebacks. I doubt any court will find such terms invalid. They have a legitimate purpose of risk mitigation, the companies will have the data and actuarial analysis to show that the amounts held in reserve are reasonable for the level risk, and the ultimate purpose is to support the strong consumer protections that credit cards provide.