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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 are forgivable, as long as they are rectified. It may be a transaction you don’t recognize or an instance where the merchant’s charged you twice. 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 transaction.
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 receipt.
- 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?
Firstly, please ensure that the charge in question is indeed an error by following these steps:
- 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, bearing 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 to their trading 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.
If you are still unable to resolve the issue after doing all of the above, contact your bank immediately to initiate an investigation.Back to top
How do I lodge a dispute?
The process for lodging a dispute will vary by bank. Some will let you provide the necessary information online, while you may need to call others.
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 not be successful.
Once you have lodged your credit card dispute with your bank, you can expect it to go through these 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 charge back 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.
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?
American consumers have the right to not be charged for goods or services they did not receive. However, you should follow certain steps when using your credit card to protect yourself and your credit rating:
- 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 in lodging 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 is 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 to 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.
Frequently asked questions
- Will I be obligated to pay interest on a disputed item?
No, the bank will not apply interest to items on your statement that are under dispute.
- Are there fees for disputes and chargebacks?
Resolving a dispute will be done at no cost to you, but a chargeback may incur a fee. Check with the credit card terms and conditions to find out how much they charge for this service.
- How long does it take to resolve a dispute?
It will depend on the bank and the circumstances, but the bank should be keeping you informed of their progress during the process. Expect it to take no less than a month, and in many cases even longer, for the charge to be removed from your account.
- When should I lodge the dispute?
After checking over your own records to make sure that there is indeed an error, you should lodge the dispute immediately. This should be no more than 30 days after the date of the statement on which the error appears.
- Should I still make payments towards my credit card while a dispute is under investigation?
Yes, you should continue with your payments as normal in order to avoid late fees or added interest.
- What do I do if the dispute is not resolved in my favour?
Documentation from the merchant will be presented to your bank and then forwarded to you if they feel your dispute has no merit. You can either accept this and pay the charge, or opt to continue to dispute the transaction by providing evidence which negates theirs.
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