Your tech support company runs scams. Stop—or disguise with more fraud?

Michael Cotter faced a significant challenge at his tech support business: an alarming rate of chargebacks. The root of the issue was clear; employees at Tech Live Connect were deceiving customers across the United States. The typical scam began with a pop-up alert claiming that a user's computer might be infected with a virus. This was followed by a suggestion to call a toll-free number for assistance, leading victims to Tech Live Connect’s Indian call center. Once connected, callers were asked for remote access to their systems, where they were falsely diagnosed with various issues and charged exorbitant fees for non-existent repairs. Many of the call center employees impersonated representatives from reputable companies like Apple or Microsoft. As complaints poured in, so did chargebacks, with customers disputing the fraudulent charges with their credit card providers. A high chargeback rate is often indicative of fraud, prompting payment processors to issue warnings or even threaten to terminate accounts. By mid-2015, one payment processor indicated it might soon shut down five of Tech Live Connect’s merchant accounts due to these chargeback issues. While Cotter had the option to put an end to the fraudulent practices plaguing his company, he instead chose a different route. He claimed to have a policy to terminate employees engaged in scams, but later acknowledged that enforcement of this policy was inconsistent, with some repeat offenders even receiving promotions. In 2016, seeking to address the chargeback crisis without eliminating the source of income, Cotter adopted a controversial solution. He began acquiring virtual debit cards, which Tech Live Connect used to create fake invoices. This tactic artificially inflated the number of legitimate transactions processed, masking the extent of the fraud occurring within the company. As a result, the chargeback ratio began to decrease, at least on the surface.