If you pay with plastic and things go wrong, you could get your money back from your card provider – thanks to chargeback.
If you pay with plastic and things go wrong, you could get your money back from your card provider – thanks to chargeback.
Chargeback is a scheme available on debit and prepaid cards. It also applies to credit cards when you don’t have Section 75 protection. If you buy something and things go wrong, chargeback allows you to reverse the transaction.
If your application for chargeback is approved, then the bank takes the money that it previously deposited into the retailer’s bank account and returns it to your bank account.
Chargeback and Section 75 are not the same thing.
Section 75 refers to Section 75 of the Consumer Credit Act. It means that in certain circumstances, you have a legal right to a refund from your credit card provider if you are unhappy with a purchase. Section 75 only applies to purchases made with a credit card and the purchase has to be worth between £100 and £30,000.
You can find out more about Section 75 in our guide.
Unlike Section 75, chargeback isn’t a legal requirement, it is simply a voluntary scheme that some banks have signed up to.
If your bank is a member of chargeback, then any spending on your card can be disputed, and you can potentially get your money back.
You can use chargeback when you buy something and:
Before you use chargeback, you should try to arrange a refund from the retailer. If this fails, then you should consider chargeback.
Chargeback doesn’t just apply when you buy goods – you can also claim when a purchase for a service goes wrong. For example, if you book a flight and the airline goes bust before your trip, you could apply for a refund through chargeback.
You can also use chargeback if your card is used fraudulently.
There are certain circumstances when chargeback doesn’t apply:
There’s no limit on the amount you could get back via chargeback. So, if you paid £300 for a flight and the airline goes bust you should get £300 back. Or, if you were charged £75 for a £50 item, you should get £25 back.
But if you paid with a credit card – and the value of the item was between £100 and £30,000 – you should claim via Section 75 rather than chargeback. That’s because Section 75 is legally binding (rather than voluntary like chargeback) so you will stand a better chance of getting a refund.
Before you can make a chargeback claim you need to try and sort out the problem with the company you bought the goods or service from. When you do this, make a note of the times and dates of phone calls or keep any emails, so you have evidence that you tried to resolve the problem.
To make a chargeback claim you need to contact your card provider. You can do this by calling them, visiting a bank branch or emailing them. Some providers have online forms you can fill out.
You will need to give them full details of the transaction and what went wrong.
This should include:
Your card provider may also ask you to provide invoices, receipts and any correspondence you had with the retailer plus details of their terms and conditions.
Some bank staff may be unaware of the chargeback scheme (it’s not as well-known as Section 75). If the person you’re dealing with is unaware of the scheme, ask to speak to a supervisor.
The time a refund takes with chargeback will depend on your bank. Once you have submitted your chargeback request you should be given a timeline by your bank.
In some cases, your bank will immediately credit the money to your account but with a warning that it may take it back if your claim is ultimately rejected. So, don’t spend the money until you know you won’t have to give it back.
If after eight weeks your claim hasn’t been resolved, you can complain to the Financial Ombudsman.
Yes, chargeback claims can be denied. The retailer or company you have made your chargeback claim against has the right to dispute it.
If your claim is rejected, you should be told why. If you’re unhappy with the decision and think it was unfair, you can complain to your bank. If that doesn’t resolve things, you can take your case to the Financial Ombudsman.
Try to make your chargeback claim as soon as you notice a problem. Most card providers give you 120 days from the transaction or when you were due to receive the goods to register a chargeback request.
There are some exceptions to the time limit. If you’re not sure of the time limit the best thing to do is speak to your card provider.
Making a chargeback request shouldn’t have any effect on your credit score. Your credit rating is there to show lenders if you are a reliable borrower or not. Disputing a transaction doesn’t impact your ability to borrow and repay debt successfully.
Read our guide to find out what does affect your credit score.
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