Cardholders have the right to dispute transactions made with their cards without their knowledge.
So how does the process work?
- The dispute is first made by the cardholder to the bank that issued their card.
- The bank forwards this request to the merchant where the transaction was made.
- The relevant bank requests details about the disputed transaction from the merchant.
- If the requested details are insufficient and the cardholder is found to be right, the disputed transaction amount is collected from the merchant by the merchant's bank.
- The amount collected from the merchant is transferred to the bank that issued the card.
In short, the flow described above is called a chargeback.
What to watch out for when disputing
It is important to dispute quickly. Dispute deadlines depend on card scheme and country rules; if you are late, you may lose your rights. When the statement arrives, unknown transactions should be checked immediately and reported to the bank in writing or through a recorded channel.
You should give the bank information such as whether the card is physically with you, and the date and amount of the transaction. If fraud is suspected, the bank may replace the card.
As a result of the dispute, the amount may be refunded temporarily, but the final decision is made based on the merchant's response and the evidence. This whole process is known by its short name, chargeback.
