Credit card chargebacks: how to reverse fraudulent card activity

How to request a chargeback

If someone has made a fraudulent transaction using your card, or you've paid for an item you never received, you can request a chargeback.

Credit card providers have their own processes for chargebacks, but it's usually something like this:

1. Check the transaction carefully. Some merchants trade under a different name to the one listed in your transaction activity. Look at the amount spent, the time and location, and search the name of the business online (you can use this site).
2. Consider your card security. If it's a big, fraudulent transaction it might be worth locking your card for security.
3. Request a chargeback via your bank or card company. Depending on who you bank with this is called a chargeback request or "raising a dispute." You can do this via phone but many providers let you do this via their app as well. You may need to complete a chargeback or dispute form.
4. Provide relevant documentation (if requested). Your bank or card issuer may ask for purchase receipts, account statements or other information.
5. New card. If you've been the victim of fraud your bank or card provider will cancel your card and issue you a new one.
6. Wait. How long a chargeback takes depends on your card provider and your case. Simple disputes can be resolved within days, but if the merchant contests the chargeback it can take weeks or longer, so ask your provider what timeframe to expect. If the transaction is still pending you'll have to wait until the transaction goes through. If it's approved, your credit card provider will deduct the amount owed from the merchant and credit it back into your account.
7. Getting a resolution. Hopefully your chargeback is processed and you can move on. But if the merchant disputes the chargeback or the bank/card company investigates and determines the transaction is legitimate, you may have to provide further evidence or raise a complaint with your bank. If you're still not satisfied with the result, you can make a complaint to the Australian Financial Complaints Authority (AFCA).

When can I request a chargeback?

A chargeback is only available under certain circumstances:

• Unauthorised transactions. These include unrecognised or fraudulent transactions that appear on your account, which have not been authorised by you or an additional cardholder.
• Different transaction amounts. If the amount on your account statement doesn’t match the amount on your receipt, you may be eligible for a chargeback.
• Duplicate processing. This happens when a merchant accidentally charges you twice.
• Cancelled recurring transactions. This happens when a recurring transaction goes through even though you have cancelled it.
• Faulty or defective purchases. If your purchase arrives with faults or defects or it’s not as described and the merchant refuses to refund you, then you can request a chargeback.
• Unfulfilled services. These include services that have been paid for but not rendered – for example, if you booked and paid for a company to clean your home and they never showed up.
• Missing or undelivered items. This happens when you have ordered goods but they did not arrive.
• Missing refunds for returned items. When a merchant has accepted your return, but fails to process the appropriate refund to your account.

In most cases, your credit card provider will advise you to approach the business directly and try to resolve the issue before you request a chargeback. This is usually a faster way to deal with the issue as chargeback requests can take weeks or longer to be assessed.

But if you have tried to get a refund and been denied when you think you're entitled to one, you can request a chargeback and include details of your attempts to get a refund as part of the process.

When would a credit card chargeback be denied?

The most common reasons a provider might deny a credit card chargeback include:

• You provided incorrect or insufficient information. This happens if you made mistakes filling out the chargeback request, lied or did not provide enough required details.
• You’ve already been compensated. You cannot be compensated twice for the same transaction, so your chargeback will be denied if you have already received a cash refund from the merchant.
• You’re eligible for an insurance claim. Your chargeback may be denied if you can make an insurance claim.
• It’s too late to apply. Most issuers have specific time limits for requesting chargebacks. You must apply within your card provider’s specified time limit or your chargeback request will be denied by default.
• The merchant successfully proves the transaction. During the chargeback investigation process, merchants are given the opportunity to dispute the chargeback request. If they are able to provide evidence that the transaction was correctly processed and that all items were delivered to you in good order, your chargeback request may be denied.

How to deal with a denied chargeback claim

If your credit card chargeback is denied and you think the decision is not fair, you can make a formal complaint to your provider or through the Australian Financial Complaints Authority (AFCA). This is the official dispute resolution scheme for financial services in Australia (previously the Financial Ombudsman Service).

You can lodge a complaint with AFCA online or by calling 1800 931 678. You can also lodge a complaint by mail.

Depending on your circumstances, you may also be able to consider the following options:

• Submit an insurance claim
• Contact the merchant directly
• Look into other dispute or resolution services (for example, those provided by PayPal or eBay if relevant)

A credit card chargeback is more likely to succeed if you apply within your card provider's time limit and provide all the necessary details and documentation. In some cases, your chargeback may be denied because you’re eligible to make an insurance claim for the item. If it gets more complicated than that, you can always file a dispute.

Understanding how the whole chargeback process works beforehand will help ensure that you get what you’re entitled to.

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