Being a consumer can be a risky business with the amount of nefarious capitalism around the world. It's easy for anyone to get caught out by buying faulty or damaged goods, and perhaps even easier if you're buying 'blind' through the internet. Thankfully all is not lost and there is some action you can take to get your money back before having to resort to legal action. This article focuses on the applications of 'chargeback'.
Chargeback and Section 75
There are two methods of claiming, depending on the actual dispute:
Section 75: Refers to the Consumer Credit Act which is enshrined in law, and allows you to claim for purchases of more than £100 on your credit card.
Chargeback: Is a scheme that most banks subscribe to as terms and conditions of operation. You can use it for all debit card purchases and is useful for credit card purchases of under £100, which wouldn't be covered by 'section 75'.
You can use chargeback typically in the following scenarios; i) the goods you bought were damaged ii) the goods were not as described iii) the trader has ceased to exist since you made the purchase.
By writing to your card provider you can ask them to refund the money, stating your grounds for the case. You may or may not get your money back, it's important to note that there is no liability on behalf of your card provider to refund you the money. What actually happens is that your provider contacts the provider of the merchant to ask for a refund. Assuming that the application is accepted, and that there is money in the account at the other end, you'll be refunded the relevant amount directly back into your bank account. But of course there is no guarantee that you will win the case, and you should make every effort to supply what evidence you can when making your initial claim.
Being able to give evidence is the main requirement for making a claim. This will clearly vary by case, but it may be something simple to backup your claim. For example, in the event of goods not arriving, your evidence may be that signature obtained by the courier who delivered the goods, isn't your signature.
The time limit for making a claim is 120 days. The clock starts ticking usually the day you first become aware of the problem, but it can vary in special circumstances. The overall cut-off point for Visa chargeback is 540 days from the original date of the transaction. For tangible goods that you have bought, the time limit starts from the day you receive the item(s).
If you're buying something for a future date, e.g. a flight, and the provider went bust, the breach of contract would begin from the departure date of the flight.
If you're using your card to top up a PayPal account, it's worth noting that the initial transaction in terms of chargeback, is that of you using your card to fund the PayPal account. Therefore any subsequent purchases you make through your PayPal account are not covered by chargeback
Taking It Further
Chargeback is quite unknown – even to some bank staff. If your provider rejects your claim, you can consider escalating it to the Financial Ombudsman, which is a free service, but needs to be done within 6 months of the final piece of correspondence with your bank.