Overall, while there isn't a universal success rate for credit card disputes, many estimates suggest that a substantial percentage--often cited around 50-70%--of disputes can be resolved in favor of the customer, particularly when the customer has a strong case.
Winning chargeback disputes is a challenge for merchants, with success rates typically hovering around 20-40%, depending on the industry and the quality of the evidence provided. Many disputes are lost due to insufficient documentation, delayed responses, or lack of expertise in presenting a compelling case.
Disputing a credit card charge has a 96% success rate
Of those who disputed a claim, 75% had an authorized charge, 21% claimed they didn't receive the goods they paid for or they were defective and 21% said they canceled a subscription and were still charged.
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.
People search services often have high chargeback win rates because their transactions leave strong digital records. These services might retain search details and customer confirmation. This evidence helps the business prove the customer authorized the service.
Filing claims might be extra work, but the majority think it's worth it. Among those who've successfully disputed a claim, 91% say it was resolved within a month and 98% feel filing was worth it.
What does the credit card company have to do? They must acknowledge receipt of your letter within 30 days. Within 90 days or two billing cycles, they must investigate your dispute.
However, banks are expected to investigate dispute claims before initiating chargebacks. If a cardholder files a bank dispute, the bank will investigate the claim. They will then decide whether the cardholder's claim is true, and if a chargeback is justified.
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.
Key takeaways
If the credit card issuer denies the dispute, the customer can request supporting documents and can also appeal the decision or file a complaint with consumer protection agencies. If the dispute is still not resolved, customers can seek legal advice and file a case.
Yes, banks do contact merchants when a dispute or a chargeback is filed. When a cardholder disputes a transaction, the bank initiates a chargeback and contacts the merchant providing a reason code for the dispute.
The issuer then makes the final decision on whether to give the customer the chargeback or deny it. If the customer's chargeback is denied, the merchant will get the transaction amount refunded to their account. If the chargeback is approved, the customer gets the purchase amount refunded to them.
If the merchant fails to submit a response by the deadline, the merchant will accept the chargeback by default. Merchants may decide to accept chargebacks for several reasons. Sometimes the chargeback is based on true fraud or some other valid and inarguable reason, and there is no point in trying to fight it.
Your credit card company has 30 days to confirm it got your letter and 90 days to investigate your dispute. During this time, you may choose whether or not to pay the disputed amount.
The federal Fair Credit Billing Act gives you the right to dispute a charge under certain circumstances, and many issuers make the process much easier than the law requires. But just as you shouldn't abuse a generous return policy, you shouldn't dispute credit card purchases without a legally valid reason.
In some cases, the chargeback fee can be greater than the value of the transaction being refunded—meaning it's more than a double-whammy to their bottom line. Mastercard estimates that merchants incur $15 to $70 in operational costs for every card dispute.
Detailed Investigation Process
The investigation begins when potential fraud is identified, either through customer claims or the bank's fraud detection system. Investigators analyze transaction data, looking for fraud indicators such as location data, timestamps, and IP addresses.
Key Takeaways
In some cases, even if you willingly paid for something, you can file a dispute. This includes when there is a billing error, you did not get the item in acceptable condition, or you did not receive the full services promised.
According to the Consumer Financial Protection Bureau (CFPB), credit card companies sue their customers about 12% of the time. On average, credit card companies sue to recover balances over $2,700—this isn't a set amount, but an average. Credit card companies can and do sue on debts both larger and smaller than $2,700.
In a Nutshell
The cardholder can face consequences for chargeback abuse, including account freezes, losing one's bank account, damage to one's credit score, and even legal consequences.
The credit bureau must give you the results in writing and, if the dispute results in a change, a free copy of your credit report.
Bottom Line. Disputing a credit card charge may take time. But winning a dispute is possible, especially if you're aware of the laws that protect you and you have plenty of documents that can help your case. Just remember that merchants have rights too.
2) What is the 609 loophole? The “609 loophole” is a misconception. Section 609 of the Fair Credit Reporting Act (FCRA) allows consumers to request their credit file information. It does not guarantee the removal of negative items but requires credit bureaus to verify the accuracy of disputed information.
Losing a dispute does not necessarily hurt your credit, but it may leave it unchanged if the information you were hoping would boost your score is rejected.