Banks may deny a dispute if their investigation finds insufficient evidence of fraud, or if the merchant provides proof of a valid transaction, such as a signed receipt or shipping confirmation. Other common reasons include filing the dispute too late, failing to attempt merchant resolution, or, in the case of debit cards, the issue being a billing dispute rather than unauthorized fraud.
However, if your dispute is denied, and those charges remain on your account, it can lead to a negative balance. This negative balance, if not promptly addressed, can be reported to credit bureaus, potentially damaging your credit score. This issue is where the Fair Credit Reporting Act (FCRA) becomes relevant.
Chargebacks are often denied because cardholders don't provide enough evidence. Sometimes, 34% of chargebacks involve fraudulent transactions [1]. This shows how important it is to back up your claim with solid proof. Banks and issuers need evidence to confirm that disputes are valid.
Chances of winning a bank dispute (chargeback) are generally good for consumers with valid claims, often resulting in provisional credit and a win, but statistics show merchants win less than half their challenges; for consumers, having strong evidence like proof of non-delivery or unauthorized charges is key, while merchants must meticulously follow rules, provide detailed data (proof of delivery, communication), and act quickly to improve their odds, which are much better in "friendly fraud" (around 44%) than true fraud (around 9%).
To win a civil case, you need evidence that proves each legal element of your claim by a preponderance of the evidence. This typically includes documents, witness testimony, physical or digital proof, and sometimes expert opinions.
The most frequent causes of denials fall into a few key categories.
The Bank Fraud Investigation Process: A Step-by-Step Breakdown
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For buyers, the best dispute reason is arguably fraud or unauthorized activity. Cardholders who can produce compelling evidence showing that they did not approve a transaction are more likely to win a dispute than if it was initiated for another reason.
Refusing a refund
Your bank can refuse a refund for an unauthorised payment if they can prove you authorised the payment, you acted fraudulently in relation to the payment, were negligent in protecting access to your accounts or failed to notify the bank within 13 months of the unauthorised payment.
If you dispute a transaction, the company you transacted with may lose out on revenue and merchandise. They'll also be assessed chargeback fees, and may incur costs associated with responding to your dispute.
How to Appeal a Denied Dispute Claim: Your Complete Guide to Next Steps
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After conducting an investigation, your card issuer may deny your dispute. For example, the issuer may not find evidence that the transaction you disputed was unauthorized. The issuer may deny the entire disputed amount or a part of it; either way, it should inform you in writing about the denial and how much you owe.
How to Fight
Direct evidence is the strongest type of evidence as it can prove that something happened and link someone to an incident. Direct evidence can be CCTV footage, eyewitnesses or digital and physical evidence. For example, an individual makes a social media post targeting another employee.
Common examples include guns, DNA, knives, blood samples, fingerprints, and other material artifacts. The material must have been connected to the crime to qualify as real evidence. Therefore, real evidence is arguably the most central piece in a trial as it proves or disproves your case.