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How do you reverse a credit card transaction?
Do you need an incorrect credit card charge reversed? Learn how to dispute transactions with your bank.
Mistakes on your credit card statement can happen. It may be a transaction you don’t recognize, a direct payment after you’ve cancelled it or an instance where the merchant has double charged you. Whatever the case, you should always immediately bring any inconsistencies in your statement to the bank’s attention, where you’ll be given the opportunity to dispute and reverse incorrect charges. This is especially urgent if you suspect your card has been stolen or breached, since you’d want the account instantly frozen to prevent more fraudulent transactions.
What's in this guide?
- How do I lodge a dispute?
- What transactions can I dispute?
- What should I check before I dispute a transaction?
- What happens after my dispute is lodged?
- What’s the difference between a chargeback and a disputed transaction?
- What should I be wary of?
- Compare credit cards that can help to protect you
- Frequently asked questions
How do I lodge a dispute?
The process for lodging a dispute will vary between banks, however you can usually lodge a dispute in one (or more) of three ways:
- Online via your banking website
- Calling your bank
- Visiting your bank in person
According to their websites, you can lodge a dispute with the biggest banks in Canada in the following ways:
|Bank||How to lodge a dispute|
What transactions can I dispute?
It is your right as a consumer and account holder to dispute a variety of credit card errors that include:
- Unauthorized transactions. Any transactions that were not made or authorized by you or an additional cardholder.
- Fraudulent transactions. A transaction that you believe was made fraudulently.
- Inconsistencies. Items on your statement that do not match the item amounts on your receipts.
- Mistakes. Transactions that were mistakenly charged to your account more than once.
- Refunds. Refunds or credits that have not been processed, or that were wrongly processed as debits.
- Cancellations. Charges for a reservation you made but cancelled within the cancellation period.
- Cancelled auto-payments. A cancelled automatic payment that is still being deducted.
- Faulty or defective goods. Goods that you paid for but have not received, have been delivered but are not as they were described to be or that arrived to you faulty or defective.
- Unfulfilled services. Services that have not been rendered.
- ATM errors. An ATM withdrawal that dispensed the incorrect amount of money.
What should I check before I dispute a transaction?
Ensure that the charge in question is indeed an error by doing the following:
- Check all your receipts and transaction records for the period in question, paying close attention to items from the same retailer or financial institution. Try reconciling total amounts over the period, keeping in mind that some transactions may not be processed on the same day.
- See if you can relate the purchase to something else you bought in the same period, given that some merchants may have different billing names.
- If you have an additional cardholder, check to make sure the purchase wasn’t theirs.
- If it is the amount that does not match, check if an exchange rate, international transaction fee or other surcharge was applied by the merchant.
- If the transaction was for an automatic payment or direct debit that you believe has been cancelled, contact the retailer for clarification. Some contracts specify cut-off dates for cancelling regular payments, which makes the charge legitimate if your notice of cancellation was given after that date.
What happens after my dispute is lodged?
You will receive confirmation from the bank once they have received your request for a dispute resolution. At this point, it may be necessary for you to sign a form authorizing their investigation which you will need to return to the bank in a specified time frame. They will also likely ask that you send them certain documentation in order for them to properly investigate the dispute. If you fail to provide them with all necessary information, your dispute will likely be unsuccessful.
Once you have lodged your credit card dispute with your bank, it usually goes through three stages:
|Dispute Item Raised||Dispute Resolution Credit||Dispute Item Resolved|
|The transaction in question is being reviewed.||Your account is credited with the correct amount of money.||The bank is no longer reviewing the transaction.|
What’s the difference between a chargeback and a disputed transaction?
There is a distinct difference between a chargeback to your account and a transaction that needs to be disputed by the bank:
- A chargeback refers to purchases made using a debit directly from your bank account. If such an error is made, you should first try and resolve it yourself directly with the retailer. If not, your bank will dispute the claim with the retailer’s bank but only if you ask within 30 days of the transaction. Make sure that you are prepared to provide the bank with all of the information you have about the transaction and be aware that you might be charged a fee for this service.
- Disputed transaction
- This term is used for credit purchases where a charge appears on your statement that you believe was made in error, is in the wrong amount or is for goods that you ordered but were unable to use.
What should I be wary of?
In order to protect yourself when using a credit card, you should follow certain steps including:
- Shopping online. When shopping online, only make purchases with established merchants that have been in business for an extended period of time. Websites can be set up from anywhere in the world, making it difficult to track down an individual who makes a charge to your account for goods, and then closes the site. In this case, you may have to pursue a chargeback instead of reversing the credit card transaction.
- Print your online receipts. When completing a check-out online, make sure that you print or email yourself a copy of the receipt. This will help you to lodge a dispute if the goods are never received.
- Save credit card receipts. When using your credit card in a store, you should always check the receipt before signing it. Also, save all receipts until the next billing cycle to ensure that it’s accurate.
- Sign your credit card. If a merchant has a signed receipt from your account, it will have to match the signature shown on the back of your credit card.
- Contact the bank ASAP. Do not wait if you notice a charge on your credit card that should not be there. The bank is only an intermediary between you and the credit card companies, which all have different criteria and time frames that have to be met for resolving disputes.
Compare credit cards that can help to protect you
While it varies between credit cards, purchase protection usually offers insurance for up to 90 days when products bought with your card are lost, stolen or accidentally damaged.
Frequently asked questions
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