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Disputing Credit Card Transactions (Chargebacks)
If you are a merchant looking for information about chargeback prevention, please see our commercial articles section.
What is a chargeback?
A chargeback is when your credit card issuer reverses a disputed transaction on your account, so that a refund appears on your card and the merchant is redebited through their processing bank. If necessary, the card issuer will electronically send a copy of supporting documentation to the merchant's processor to substantiate this action. A merchant has the chance to respond if they believe the chargeback is unfair, but in many instances this does not happen. Chargeback regulations are set by Mastercard and Visa, and not by the card issuer.
The most common disputes are shown below, with advice about how to approach the matter with your card issuer.
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Unrecognized transactions
If you do not recognize a transaction on your account your card issuer will send you a declaration form to sign, confirming the transaction is unauthorized.
Not all unrecognised transactions are the result of fraud. In the case of none face to face transactions, they may be a result of a keying error by a cardholder with a similar card number (internet transactions) or by the retailer (telephone transactions).
Sometimes the transaction is, in fact, the cardholders. Before disputing a transaction bear in mind that items may appear on your statement under the name of a parent company or under an unfamiliar location (for instance, where the retailer's head office is situated rather than where the transaction was made). If an item is queried in error the merchant will usually send information supporting the transaction to your card issuer in order to help their customer recognise it. If the cardholder then recalls the transaction, the issuer can redebit it.
Goods not received
Although following the same Visa and Mastercard regulations, banks may vary slightly in how they prefer to deal with a dispute. While many issuers will ask for you to put your goods not received dispute in writing, others may send you a form to complete. The information they require is the same.
In your letter, put the details of the transaction as they appear on your statement and state that you have not received your merchandise. If you were given an expected delivery date you should include this, although if you were not given one the issuer can still process the credit from 30 days after the item was charged to your account. A chargeback for this type of dispute cannot be performed unless the cardholder has first attempted to resolve the matter with the merchant so specify the date of when you contacted them, and what their response was if you received one. Provide your card issuer a copy of your invoice and any correspondence if you have it.
Next page - Disputing credit card transactions
Disclaimer :- Chargeback regulations are subject to change at the discretion of Visa and Mastercard International. Therefore, the information above should be taken as a guideline only, as there may have been alterations to chargeback policies since the publishing of this article.
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