For many people all around the world learning about the Chargeback Dispute process is quickly becoming a necessity. The number of fraudulent activities online is expanding at an unprecedented pace and to combat them, people have to familiarize themselves with all the processes involved. After all, we as end consumers cannot let these crooks get away with the hustle, right?
Unfortunately, a lot of people are not familiar with the steps involved and as a result, they are clueless about the things they need to do. However, the situation is slowly changing and nowadays the regulators are stepping in to create awareness and by the time they reach their goal, fraudulent activities might become a thing of the past.
Nonetheless, for now as that is not the case, so let us start looking at the options available for us.
Chargeback Dispute Background
Scams and hustle are not something which started a decade ago, fraudulent activities have been going around since generations. With time, scammers and crooks have updated themselves and as they are more creative in their approach, the law enforcement agencies were never quite able to catch up to them or eradicate them.
The government authorities quickly realized that they had to come up with a way to protect the consumers and as a result, they made the Chargeback process a thing through the 1978 Fair Credit Billing Amendment. Though the amendment was not called as Chargeback initiation, it laid out the terms which matches the description of the Chargeback process.
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In simple words, Chargebacks are nothing more than a mechanism designed to protect the customers from fraud platforms.
How does Chargeback exactly work?
In this section, we are going to go over the theory part so that by the time you finish reading this post, you can easily understand the exact science behind it. Chargebacks are initiated when the end consumer disputes the purchase with their issuing bank and tries to undo the transfer of funds. Whenever an issuing bank receives the Chargeback notice, they will provide the customer with provisional credit while the underlying matter is being investigated.
First and foremost, the issuing bank will send a retrieval request to their counterparts in order to get a clear picture about the situation. The merchant who is accused of the fraud or misrepresentation will have a chance to prove their innocence and they can either accept it or fight against the narrative. After all the data is collected and analysed carefully by the bank, it will make both the parties aware of their judgement and adjust provisional credit accordingly.
Ofcourse, their decision doesn’t have to be treated like the word of God and any party involved can apply for reinvestigation or arbitration phase. Note that the arbitration process isn’t something which can be resolved within a few days or weeks. It can take upto years together and it will cost hundreds of dollars to the networks involved. So, before you challenge the initial judgement of a bank, double check all the details and then proceed.
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How to handle the Chargeback Dispute Process?
Year by year, the number of customers applying for a Chargeback Dispute process is increasing. Approximately, 50% of the customers(worldwide) apply for chargebacks which explains the number of delays present in the system. This segment is expected to touch $40 billion by 2025. Many people think that the chargeback process is an easy way out in case they encounter any kind of shady platform online.
However, that is not the case and there are a lot of factors one needs to consider before taking any action. First and foremost, try your best to resolve the issue with the merchant by talking with their support team. If the issue is not resolved, then you can request for a chargeback with your bank with just a phone call.
Secondly, if you have any evidence or data that proves your point, let the bank officials know about it. Based upon your personal case, the bank will find appropriate reason code and will communicate with their counterparts in order to get the money back. Selecting the correct reason code is a crucial part of the recovery process and if you don’t know what you are doing, then it is better to let the professionals handle it.
The reason code also depends upon the vendor. For example, VISA and Mastercard both have different reason codes for the same underlying situations. To be on the safer side, always visit their official websites to know the exact details. In general, the reason codes can be categorised into 3 types and they are as follows.
True Fraud – If anyone is a victim of phishing or unauthorized transactions, then this is the category you have to select while submitting the form. Nowadays, due to the growing dark markets and data leaks, this type of chargebacks are becoming common and merchants generally don’t try to even dispute the transactions unless they have solid evidence.
Friendly Fraud – Under this type of chargebacks, customers usually will be on the wrong side of the equation. While filing the dispute, the customers might have flagged payments they don’t recognise as fraud. Though, the intent is not important, Friendly fraud chargebacks can have serious consequences. So, be careful before choosing this option.
Merchant Error – If and when the merchant is truly at fault, this chargeback can be utilized to recover the funds. Note that, the flaw from the merchants side should be fixed immediately to remedy the situation in the future and prevent from another error occuring or else it will turn into a repetitive task.
How to file a dispute?
The process of filing a dispute is fairly simple and most people who know their way around the online world will not face any problem. As soon as you notice a possible fraudulent charge, contact your credit card issuer and report the concerned transaction. You will have to mention your reasons for filing the dispute and if you have any hard data, then pass it on to the bank officials.
Using the dispute information, the issuer bank will get in touch with the Merchant’s card processor and hear their side of the story. The merchant can choose to pay out or fight against the claims. Either way, the merchant can take upto 30 days to respond.
For any reason, if you cannot settle the dispute despite being on the right side of the law, get in touch with our team. We offer free consultations to everyone and once we get the basic details, we will let you know the best possible course of action.
Chargeback Dispute against Scam Merchant and Investment Fraud
It is no brainer that scam merchants on the web are rising. They have realised that the vast majority of the public would never take action against them due to many reasons such as lack of familiarity with the rules or procedures, amount not being worth their time, fear of legal battles, etc,. So, they do their best to appear intimidating and may often engage in fighting the disputes.
Nonetheless, people should never let them off the hook so easy and during those times, it is better to hire a reputable agency to do your bidding. After all, an organisation will be better equipped in handling the situation and they will deliver consistent results. Remember, the success ratio for fund recovery might not be 100%, but it is around 83% which is decent enough.
For investment fraud related matters, individuals have to contact the local financial regulatory bodies and raise a formal complaint. Investment frauds are often complicated as many of the firms at fault are situated offshore and multiple parties are involved. So, for best results just like we mentioned above, collect all the data and present it to the bank and the local cyber security unit.
Though individual complaints are not always investigated, it will help them in the long run. Coming to recovering funds from them, due to the complexity present, it is better to hire an agency for the task.