Chargeback

First: what happened to the card payment?

What chargeback is, and what it is not

Chargeback is a mechanism under card-scheme rules by which the card issuer can seek to reverse a transaction through the merchant’s acquiring bank. It is not a general legal cause of action against the merchant and it is not the same as the bank accepting legal liability for the underlying contract.

Because it is scheme-based, the conditions can differ between Visa, Mastercard and other schemes and can change. The consumer’s practical job is to describe the facts accurately and provide evidence; the bank’s job is to understand its scheme and identify whether a valid dispute can be raised.

Debit card versus credit card

Chargeback can potentially be used for both debit-card and credit-card transactions. That is a major difference from Section 75, which depends on qualifying credit. A debit-card purchase that has no Section 75 protection may still have a chargeback route.

Using a credit card can give both possibilities. If Section 75 may apply, ask the issuer to consider it rather than allowing a failed or out-of-time chargeback to become the end of the complaint.

Reason codes are the bank’s technical language, not a test of whether you used the magic words

Card schemes categorise disputes using defined conditions or reason codes. Consumers often do not know those codes and should not be expected to select one from a scheme manual. Tell the bank what happened: “merchandise not received”, “service not provided”, “refund not processed”, “not as described”, “duplicated payment”, and so on.

If the bank rejects because the wrong category was used, ask whether it considered the facts under the correct available condition. A dispute should not fail simply because a customer-service agent initially labelled it poorly.

Time limits: act early and identify the correct start date

Financial Ombudsman guidance says consumers usually have around 120 days for chargebacks involving goods or services, but the precise rule can be longer or shorter depending on the scheme and circumstances. The difficult issue is often when the clock starts.

Goods not received

For non-delivery, give the issuer the order, promised delivery date, delivery address and tracking. If tracking says “delivered”, explain why that does not establish receipt, for example, wrong address, no parcel, unauthorised safe place or a photograph that is not your property.

This can overlap with the retailer’s statutory delivery obligations. The chargeback process is a payment remedy; it does not replace your underlying claim against the retailer.

Services not provided or future services cancelled

Chargeback can be particularly useful when a future service is cancelled and the merchant does not refund, for example a course, event, accommodation booking or other service. Preserve the booking confirmation, performance date, cancellation notice and refund terms.

Where only part of the service was supplied, quantify the part genuinely not provided. A scheme dispute should match the actual shortfall rather than automatically seeking the entire transaction if substantial value was received.

Refund promised but never processed

A “refund not processed” dispute is evidentially different from arguing about whether you were entitled to a refund. If the merchant has already agreed to refund, preserve the email, chat or receipt showing the amount and date. Check the card account for the expected credit and allow for ordinary processing time before claiming it never arrived.

If the merchant later says the refund was sent, ask the issuer what trace or acquirer information is available rather than repeatedly asking the merchant for screenshots.

Defective, counterfeit or not-as-described goods

Some scheme conditions can cover merchandise that is defective, counterfeit or materially different from what was described. These cases usually need more evidence than a simple non-delivery claim. Show the listing/description, what arrived, the defect or discrepancy, and your attempt to resolve it with the merchant where required.

Do not overstate. “I dislike the quality” is weaker than identifying a measurable mismatch, fault or false description. An expert report can help where authenticity or a technical defect is genuinely disputed.

Merchant insolvency and disappearing suppliers

If a supplier becomes insolvent before providing paid-for goods or services, chargeback may provide a practical route to recover the card payment, subject to the scheme conditions and time limits. Do not wait for a lengthy insolvency process before contacting the card issuer if the chargeback clock may be running.

If you used qualifying credit, ask about Section 75 as well. Chargeback ordinarily addresses the card transaction; Section 75 can potentially reach wider qualifying contractual loss.

What happens after the bank raises the chargeback

The issuer sends the dispute through the card scheme to the merchant’s acquiring side. Depending on the process, the merchant can accept it or defend it by supplying evidence: often called a representation. The consumer may see a temporary credit before the dispute is finally resolved.

A temporary credit should be treated as provisional unless the bank confirms finality. Do not spend it on the assumption that the dispute is over if the bank has warned that the merchant can still defend the claim.

Merchant representations: read the evidence, not just the conclusion

If the merchant defends the chargeback, ask the issuer what evidence has been supplied and what point it proves. A delivery scan may not prove delivery to you; a signed contract may not prove the service was performed; a returns policy may not answer a claim that the goods were faulty.

Respond to the merchant’s actual evidence in a short schedule: assertion, evidence relied on, your response, supporting document. Where the scheme permits the dispute to continue, give the issuer what it needs before its deadline.

Provisional credits can be reversed

Banks sometimes credit the disputed amount while the chargeback remains open. If the merchant successfully represents the transaction, the issuer may remove that credit. A reversal does not necessarily mean the merchant was legally right about the underlying contract; it may mean the scheme dispute failed on evidence, timing or a technical condition.

Ask for the reason and then consider whether Section 75, a formal bank complaint, the retailer complaint route or court remains available.

When “this is a civil dispute” is not a sufficient answer

A bank is not required to raise every chargeback merely because a consumer has a contract dispute. But Financial Ombudsman guidance says that where scheme requirements are met, the consumer gives a consistent account and evidence, and there is a reasonable prospect of success, it will usually expect the bank to raise the chargeback.

So if the bank says only “civil matter”, ask whether it checked the applicable scheme condition, what element is missing and whether it needs further evidence. That forces the decision back onto the actual chargeback rules.

When a chargeback genuinely may not be appropriate

• The dispute falls outside the relevant scheme time limit or outer limit.
• The problem is simple buyer’s remorse and no cancellation/refund right or merchant promise exists.
• The merchant supplied what was contracted for and the evidence does not support the alleged defect or mismatch.
• The transaction type or payment method is outside the relevant chargeback process.
• A required merchant-contact or return step has not been completed and the scheme condition requires it.
• The amount claimed does not match the part of the transaction actually disputed.

Chargeback versus Section 75

Merchant dispute or unauthorised transaction?

Do not force every card problem into chargeback for defective goods. If you never authorised the transaction at all, the legal and regulatory rules for unauthorised payments may be more important. If you authorised the payment but the merchant then failed to deliver, overcharged, duplicated the transaction or failed to process a promised refund, the dispute is different.

Accurate classification matters because the evidence, legal position and scheme condition can differ. Tell the bank exactly what happened rather than simply saying “I want a chargeback”.

Chargeback is not simply discretionary goodwill

Chargeback comes from card-scheme rules rather than a standalone statutory right against the issuer. That distinction does not mean a bank can dismiss a qualifying request as optional customer service without examining it. The Financial Ombudsman says it is often good practice for an issuer to explore chargeback, explain the information and deadlines, and raise one where the scheme requirements are met and there is a reasonable chance of success.

If the bank refuses, ask whether it actually checked the applicable card scheme and dispute condition. A useful refusal explains why the condition is unavailable or why the evidence does not meet it; “chargeback is discretionary” or “this is a civil matter” does not, by itself, show that analysis occurred.

Do not let the merchant complaints process consume the deadline

Some disputes require or benefit from first trying to resolve matters with the merchant. But chargeback time limits can continue to run while the merchant promises to investigate. Tell the card issuer early, particularly where a service date, expected delivery date or cancellation date may affect the scheme clock.

Keep evidence of when you contacted both sides. If the bank later says the chargeback is out of time, ask it to identify the exact scheme deadline, the event it used as the start point, any applicable outer limit, and what it told you when you first reported the problem. A bank-caused delay can itself be relevant to a complaint even if the scheme window has ultimately closed.

Subscriptions and recurring card payments

Recurring subscription disputes require care because stopping future card authority and ending the underlying contract are not always the same thing. If you validly cancelled the merchant contract and payments continue, preserve the cancellation evidence and identify each later transaction. If you only asked the card issuer to stop a continuous payment authority, you may still need to resolve any contractual liability separately with the merchant.

For an unexpected renewal, give the bank the renewal terms, any reminder or absence of one where relevant, your cancellation attempt and the merchant response. The chargeback question is whether a scheme condition fits the transaction; the wider contract question may still need to be pursued against the merchant.

Wrong amount, duplicate payment and cash-machine style disputes

Not every useful chargeback case involves goods quality. Card schemes also have mechanisms for processing errors such as duplicate transactions or an amount different from that authorised. These can be evidence-led disputes: receipt, order confirmation, merchant invoice and statement may be enough to show the mismatch.

Do not confuse a genuine duplicate with two separate authorised purchases made close together. Match transaction dates, authorisation amounts, merchant references and receipts. If one transaction is merely pending rather than posted, give the processing time a chance to resolve before assuming two completed debits exist.

Part-card payments: chargeback normally follows the card transaction

Chargeback generally seeks recovery through the particular card transaction, so it is ordinarily limited to the amount processed through that card route. This is a major contrast with Section 75, where qualifying statutory liability can extend beyond the amount charged to the card.

If you paid a £200 card deposit and £2,800 by bank transfer, tell the issuer about the whole transaction but ask it to consider both routes where Section 75 may apply. A successful £200 chargeback does not necessarily answer whether the remaining contractual loss is recoverable under another route.

Responding to the merchant's defence

A merchant representation is not a judicial finding. Read what has actually been supplied. A delivery scan may refer to another address; a cancellation log may show a different account; a signed document may not contain the term relied upon; photographs may prove dispatch rather than receipt.

Reply point-by-point and only where the scheme still permits the issuer to continue the case. Identify contradictions with your contemporaneous evidence. If the bank simply forwards the merchant response and closes the dispute, ask whether the scheme allowed a further stage and, if so, why it decided not to pursue it.

When the bank misses the deadline

If you notified the issuer in time but it failed to raise the dispute before the card-scheme deadline, the practical chargeback opportunity may be lost. That does not necessarily end your complaint against the bank. The Financial Ombudsman can consider whether the issuer handled the request fairly, explained deadlines and acted when there was a reasonable prospect of success.

Preserve the date you first reported the problem, call notes, secure messages and any promise that the bank was “looking into it”. Your complaint should distinguish the merchant loss from the separate loss or detriment caused by the issuer's handling.

Evidence by dispute type

Evidence worth keeping

Useful wording

Opening: “Please assess this transaction under the applicable card-scheme chargeback rules. The dispute is [goods not received/service not provided/refund not processed/not as described]. Please confirm the relevant deadline and evidence you require.”

After a defence: “Please provide the substance of the merchant representation and identify which element of the chargeback condition you consider it establishes. I will respond to that evidence within the scheme deadline.”

Bank refusal: “Please explain whether you consider the dispute outside the scheme rules, out of time, unsupported by evidence or unlikely to succeed, rather than recording it simply as a civil dispute.”

Escalation to the Financial Ombudsman

If the bank mishandles a chargeback, complain to the bank. The Ombudsman can consider whether the bank understood the scheme rules, explained requirements and deadlines, gathered evidence fairly, progressed a defensible chargeback and communicated provisional credits and outcomes properly.

The Ombudsman does not rewrite the card scheme, but it can decide whether the bank acted fairly and reasonably in applying it. Keep the timeline because many complaints turn on who knew what, and when, before the chargeback deadline expired.