With the growth in online commerce, and consumers increasingly buying goods sight unseen, there’s a lot of scope for product returns. Consumers may find that what they get is not quite what they ordered. This may impel them to try to get a refund from the merchant. They may even file a dispute with the card issuer asking for a chargeback from the merchant of the amount involved.
It’s all right for a consumer to initiate such disputes, and you do have certain rights under the Fair Credit Billing Act–but what if you dispute a card transaction by mistake?
Be sure before disputing a card charge
Before you pull the trigger and initiate a dispute with your card issuer, make sure that the transaction is indeed one you don’t recognize. For one, it could be that you don’t recognize a charge because the merchant’s name doesn’t ring a bell in your mind. That doesn’t mean it’s an unauthorized transaction. What might have happened is that the merchant has a different corporate identity that it bills under.
It may also be affiliated with a different company for billing purposes.
Another possibility is that an authorized user on your card rang up the charge and did not keep you informed. So you should also check with authorized users to see if they are responsible for this charge. And it could be that the charge relates to a subscription renewal that you’ve forgotten about.
It’s a good practice to hold on to your credit card receipts for a while so that you can verify any charges you don’t recognize.
Fallout from chargebacks
You will not escape unscathed if the charge is a legitimate one. If the merchant challenges your dispute and prevails, you will be forced to pay an administrative fee “or other consequences,” according to Chargebacks911, besides being charged for the original transaction. You would also owe any finance charges due on the disputed amount.
Merchants could also retaliate otherwise. For instance, Sony tends to close the accounts of PlayStation users who file for chargebacks in addition to banning them permanently, according to Chargebacks911.
Your actions could also impact the merchant involved. For instance, it will not receive funds related to the transaction from its bank until the matter is resolved. Merchants who have a lot of chargebacks filed against them could lose their rights to process credit card payments. That is likely to put them out of business, considering the heavy volume from credit card transactions, and your actions may have contributed to that outcome.
Another point to keep in mind is that merchants will likely take care of chargeback costs by raising prices for customers and passing them on.
Fair Credit Billing Act rights
If you don’t recognize a transaction, you do have the right, under the Fair Credit Billing Act, to ask for an explanation. That may help jog your memory, and you could realize that there is nothing to dispute.
In case it is indeed an unauthorized transaction, you can then exercise your FCBA rights and file a dispute. In any event, it doesn’t hurt to be vigilant if you don’t recognize a credit card charge.
Some consumers might try to resort to their FCBA rights if they want a refund from a merchant, after experiencing buyer’s remorse, for instance. They may think a chargeback will be an easier course to take. However, it’s better to contact the merchant directly and try to resolve the issue.
The bottom line
If you dispute a credit card charge by mistake, contact your card issuer and explain the situation. You could also follow up with the merchant if required. Before you initiate a dispute, be sure that it is indeed an unauthorized charge. You should contact the merchant first and see if you can resolve the matter with it.
Contact me at [email protected] with your credit card-related questions.
FAQs
If you dispute a credit card charge by mistake, contact your card issuer and explain the situation. You could also follow up with the merchant if required. Before you initiate a dispute, be sure that it is indeed an unauthorized charge.
What happens if you accidentally dispute a credit card charge? ›
If you file a false dispute, you may be added to a chargeback blacklist by the merchant. This prohibits you from making future purchases with the merchant. If you regularly shop with that company, this could be an issue.
Can you undo a credit card dispute? ›
To cancel a chargeback, you can confirm your resolution with the merchant you previously had a dispute with, contact your credit card issuer or use an online self-service option to cancel the chargeback and then wait for the transaction to resolve.
Can you retract a dispute? ›
It's technically possible on every card network for a cardholder to withdraw a dispute after the response deadline, and even long after a dispute itself is lost.
Is it illegal to falsely dispute a credit card charge? ›
Yes, when done intentionally, chargeback fraud is illegal. When investigating chargeback fraud, it's important to keep in mind that there are legitimate reasons for chargebacks that do not constitute fraud.
What happens if you falsely dispute a credit report? ›
However you filed your dispute, the credit bureau has 30 days to investigate it. If the credit bureau considers your request to be “frivolous” or “irrelevant,” they will stop investigating, but they need to notify you of that and give the reason.
Can you get in trouble for false chargebacks? ›
Penalties for chargeback fraud can range from fines to imprisonment, depending on local laws and the scale of the fraud. In any case, it has a few consequences for both the fraudster and the merchant. Because merchants are the primary victims of chargeback fraud, they lose revenue and become liable for chargeback fees.
Can I cancel a credit dispute? ›
Call the phone number on the report. The file number or report ID will get you to a human so they can pull up the account in dispute. Tell them you no longer dispute the account and agree with the balance and prior paying history, furthermore need the dispute wording removed as it is preventing mortgage loan approval.
What happens if I lie and dispute a charge? ›
What happens if you falsely dispute a credit card charge? Purposely making a false dispute is punishable by law and could lead to fines or imprisonment.
Does disputing a charge hurt your credit? ›
Disputing a charge on your credit does not directly impact your credit score. However, if your credit report changes due to the dispute, your score may change accordingly. For example, resolving an inaccurate credit utilization error might increase your score.
To ask for a chargeback, write to your bank:
- Say you are requesting a chargeback of a transaction on your credit or debit card.
- Give details of the transaction, including the amount and the date.
- Give reasons why you wish to chargeback the transaction.
How to request a chargeback. If asking the merchant for a refund didn't work, request a chargeback with your credit card issuer. Many card issuers let you dispute transactions by phone, mail or online. You may also be able to submit a dispute directly through your card issuer's mobile app.
Can I get my money back if I dispute transaction? ›
Through a chargeback, your bank can try to get your money back from the seller on your behalf it isn't a legal right, but your bank is committed to helping you, and will treat any claim fairly.
Can I dispute a charge I made by mistake? ›
The short answer is yes, in some circ*mstances, you can dispute credit card charges you willingly made and paid for. This is in accordance with the Fair Credit Billing Act, which affords consumers some protections regarding their credit purchases.
Do credit card companies actually investigate disputes? ›
Credit card companies hire multiple fraud investigators whose primary responsibility is investigating reports of fraud. A credit card company's fraud investigation largely depends on whether the credit card owner is aware of the fraudulent transactions and reports them to the company.
Does disputing a charge hurt the merchant? ›
Does disputing a charge hurt the merchant? Yes, disputing a charge can indeed hurt the merchant. According to the information available: Navigating through the chargeback process, especially for goods not received, is described as a painful undertaking for merchants.
Do credit card disputes hurt the merchant? ›
Yes, disputing a charge can indeed hurt the merchant. According to the information available: Navigating through the chargeback process, especially for goods not received, is described as a painful undertaking for merchants.
Will a credit card dispute hurt my credit? ›
Disputing a credit card charge does not hurt your credit. However, if the information on your credit report changes because of the dispute, your score may change accordingly. Credit agencies can also note the dispute by placing the “XB” code on your account, which simply means the dispute is under investigation.
How often are credit card disputes successful? ›
You might not always get a fair outcome when you dispute a chargeback, but you can increase your chances of winning by providing the right documents. Per our experience, if you do everything right, you can expect a 65% to 75% success rate.
What happens if you lose a chargeback as a customer? ›
Possible Legal Action. In many cases, taking legal action against a merchant when a chargeback is lost is well within the rights of the consumer. Depending on the situation and legislation governing the purchase, different types of legal recourse are possible.
