What Is a Charge Dispute? How to Start the Process

A charge dispute, commonly known as a chargeback, is a consumer protection mechanism. It allows individuals to challenge unauthorized, incorrect, or problematic transactions on their debit or credit card statements. Initiated through your bank or credit card provider, this process serves as a recourse when direct resolution with a merchant proves unsuccessful. Its purpose is to reverse a transaction and return funds to the cardholder.

Common Reasons for Disputing a Charge

Consumers initiate charge disputes for several reasons. Unauthorized transactions, such as fraudulent activity, are a primary cause. Another common scenario involves goods or services not received, like an online purchase that never reaches the buyer. Issues with product or service quality also lead to disputes when items are defective or significantly differ from their description.

Duplicate charges, or an incorrect amount charged, also prompt disputes. Consumers may also dispute charges for canceled services or subscriptions that continue to be billed. Regularly reviewing account statements for accuracy is important.

Initiating a Charge Dispute

Before contacting your financial institution, gather documentation. This includes the transaction date and amount, the merchant’s name, a description of the goods or services, and any prior communication with the merchant. Keep receipts, emails, screenshots, or other supporting evidence to strengthen your dispute claim. Attempting to resolve the issue directly with the merchant is recommended as the fastest approach. During this communication, clearly explain the problem, request a refund or resolution, and record the date, time, and content of all interactions.

If direct resolution with the merchant is unsuccessful or impossible, contact your bank or credit card issuer. You can initiate a dispute by calling the number on the back of your card, using their online portal, or via their mobile application. Provide all previously gathered information, as this will expedite the process. Most financial institutions require disputes to be filed within a specific timeframe, often 60 to 120 days from the statement date.

The Dispute Resolution Process

After you initiate a dispute with your financial institution, they will investigate the claim. This investigation involves contacting the merchant to obtain their perspective and supporting evidence. During this period, your bank may apply a provisional credit to your account, temporarily returning the disputed funds. This provisional credit allows you to access the funds, though it can be reversed if the investigation concludes in the merchant’s favor.

The timeline for resolving a charge dispute varies based on case complexity and financial institution policies. While some straightforward cases, particularly those involving clear fraud, may resolve in a few days, most disputes conclude within 30 to 90 days. If the investigation finds in your favor, the provisional credit becomes permanent, and the disputed charge is removed. Conversely, if the dispute is denied, the provisional credit will be reversed, and the original charge will stand.