Transaction Disputes Explained
Despite all the good intentions of your credit card provider, transactions can still go wrong.
Duplications, unauthorised transactions and disputed amounts charged are just three examples. So, if this happens to you, what should you do?
Inform Your Provider Immediately
If you have any questions about transactions on your statement it is essential to inform your credit card provider as soon as possible. Most providers have a helpline designed specifically for this purpose. Disputed transactions are suspended during an investigation and incur no interest.
It is vital that you report disputes immediately since there are time limits attached to the procedure. Chargeback limits apply from the time the transaction appears on your statement and range from 75-120 days, depending on your card provider’s conditions.
Many card providers also have time limits regarding confirmation of whether you wish to go ahead with the dispute. If they do not hear from you within the time limit the dispute will be cancelled.
What Is A Chargeback?
This is a procedure where the issuer of a credit card - such as a bank, building society or credit union - charges a proportion of the disputed transaction back to a merchant's bank. The proportion of the transaction charged back can be all or a portion of the disputed amount .
A chargeback can occur for a number of different reasons. Some of the more popular include:
- unauthorised transaction – where no card was present and the cardholder's permission was not granted;
- non- receipt of documents requested – where the merchant's bank does not supply required information pertaining to the disputed transaction;
- goods not received – by the cardholder;
- cancellation of recurring transaction – where a merchant ignores a request from the cardholder to cancel a recurring transaction;
- another payment method used – effectively paying for the goods or service twice;
- services not rendered – merchant unable to provide agreed goods or services.
How To Avoid Unauthorised Direct Debits
Credit cards may offer the convenience to consumers to make regular payments to merchants by direct debit, but there can be significant problems if a merchant ignores a cancellation advice. Unnecessary fees and charges may be incurred by the cardholder, especially if the unauthorised transaction sends the card above its credit limit.
Inconvenience can also be suffered by the cardholder if the unauthorised transactions mean that legitimate transactions are not possible.
If the cardholder doesn't check their statements before paying the bill the unauthorised transactions could be missed, resulting in extra cost to the cardholder. If chargeback time limits are not adhered to, the cardholder may not be able to dispute the transactions, leaving them out of pocket.
To avoid the problem, always check your credit card statements as soon as possible after receiving them. If you see any transactions you do not agree with, contact your card provider. You can also try recontacting the merchant, preferably in writing, and reminding them of the direct debit cancellation.
Further Action You Can Take
If you have complained to your provider and are not satisfied with the result then you can take the issue further. The Australian Securities and Investments Commission (ASIC) is the consumer protection regulator for financial services, enforcing laws with regards to financial products and promoting honesty and fairness. A plain English guide to the Electronic Funds Transfer (EFT) code is available at ASIC’s consumer website FIDO. The EFT code details rules and regulations regarding electronic transactions, who is liable, and what channels you have to complain. If in doubt contact ASIC via telephone or their website.