Credit Cards, secured payments and what you as buyers should be looking for...
Over the last few months there have been an increasing number of fraudulent companies appearing, and disappearing, leaving many forum members burnt along the way.
There are also an increasing amount of seemingly genuine companies that despite all the evidence suggesting they are indeed legitimate, don't want to share the same risk as a genuine company in a standard operating environment.
This is a huge concern, as due to the very nature of 'pre-ordering' your funds are tied up and inaccessible until either you receive your goods, or you don't. No company's own 'buyer protection' can help you if they fail to deliver on time and cannot afford the overheads to operate. None. They will have entered administration and your non-secured funds (mostly BTC) are gone until which point if you are organised enough to pursue some form of legal recourse, you may if lucky see a small percentage of what you gave.
In short unless there is some form of Independent third party consumer protection via credit card payment you would be insane to purchase ANY pre-orders.
How many times do you need to lose funds and be burnt to learn otherwise?
The Butterfly Labs customers stand a chance to be reimbursed if they paid by credit card (not debit card) dependant on their country of origin and card issuer. The Bitsyncom/Avalon guys (and girls) don't.
Issuing banks, payment processors, Paypal, etc. goto huge lengths to perform background checks and verify the business practices of a prospective partner before allowing their company to trade with their name. Butterfly Labs have made this a lot harder for prospective companies entering an agreement with Paypal. To a great degree this is very helpful. It's very time intensive for the prospective company, as the checks are very thorough if Paypal are going to offer their brand and consumer protection to a worthwhile partner.
Any ASIC manufacturer not pursuing this route is not worth considering. They aren't taking theor customers welfare seriously. They want an easy get out clause and are not committed to seeing your side of the deal through fairly. I cannit stress this enough. They neither have invested the time, nor effort required, cannot meet Paypal's stringent criteria, do not care about their customers purchase, or don't have the faith in their own abilities, or ability to deliver their product on time.
In essence without card payment protection you are diving naked with sharks and an open wound. You're crazy. Fact.
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What do you need to be aware of?
Each country has various consumer protection laws and it would be ideal if in this thread we can share what they are, so please post what you know about where you are situated below.
Each card issuer in each country can also have their own terms and conditions, length of protection, etc. So share some of the best deals below.
Not all companies here have gone to the lengths to prove they are financially capable to undertake such pre-ordering to recognised payment processors, let alone to us on this forum. Payment processors are very strict and don't just pair with anyone. Believe it or not Paypal has some of the most stringent requirements.
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Fraud
Many companies to compete are offering to enter production directly in receipt of their chips from the foundry. This is a speculative which risk game, irrespective of design talent. It's make or break and without consumer protection, you will be the one to foot the bill.
This is totally unnecessary when a company can simply offer a more secure payment method, by applying to accept credit card payment. There is no reason not to, unless they are forcing buyers into a high pressure sales situation where buyers purchase before thinking about the consequences. The company walks away unscathed, you won't.
Bitcoin as fantastic as it is as a digital cash, is not fit for the realm of pre-ordering, it's not a secure payment method, hence almost all of the Bitcoin pre-orders have resulted on a loss and no one accountable. Companies only offering non-secure payment methods, such as Bitcoin, or wire-transfer only must be avoided unless you are willing to lose all you invest.
No matter what they promise you with respect to refunds, unless you are protected by an independent third party, forget it, walk away, a better more legitimate company that will make the effort to appease payment processors, Paypal etc. will eventually surface, especially *if* they are a serious contender.
Hedging bets, and making several payments by card over several companies with the explicit purpose of dropping purchases is fraud in your part, and illegal by breach of contract. This has to be taken seriously as in the realm of pre-orders companies are relying on that cash for non-reoccurring engineering costs. NRE is also the reason that should they not succeed and have taken payment by non secure payment means (BTC, wire transfer) you will never see your funds again.
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False refund promises, the requisite for third party protection, due diligence and common sense.
Regardless of whether a vendor offers you a no quibble refund, the practice of agreeing payment for an exchange of goods with no intention to see the purchase through is fraudulent. In any case this can be avoided if you take the time to do your own research, due diligence and make an informed choice.
In any case with respect to pre-orders, no credit card payment as a payment choice, means no strict company background and verification by a recognised third party (issuing bank, payment processor), no third party insuring the purchase, and definitely no deal.
Real companies will take the step of accepting card payment if they care about their customers and want to be taken seriously.
Use your head and apply some common sense, instead of diving blindly into the pool of sharks circling below.
Stay safe. Only pay by credit card if pre-ordering. Peace.
