A review of credit card chargebacks by Australia banks has found low levels of complaint but some areas for improvement.
A chargeback occurs when a bank, at the request of its credit card customer, reverses a credit card payment disputed by the consumer because it was unauthorised, the merchant did not deliver the goods, or the goods were not the same as their description.
In March 2012 Banking Code Compliance Monitoring Committee reported on its Inquiry regarding credit card chargebacks.
The CCMC found that the banks received in excess of 90,000 chargeback requests in March 2011, the sample month, and estimated this was typical. About 66% of chargeback requests are succesful (that is the bank agrees to chargeback the transaction)
It found a low number of complaints about bank handling of chargebacks (0.64% on average), but noted that the inconsistent information provided by banks to consumers and a low awareness of the right to complain need to be taken into account.
The report identified areas of good industry practice and areas for improvements within banks. The CCMC notes that is has discussed the findings with individual banks and will conduct a follow up exercise in late 2012 to gauge improvements in compliance with the Code.
Areas for improvement include better communications with consumers about the availability of chargebacks and the (short) timeframes required to be met. The CCMC also recommended more consistent reporting by banks on how many chargebacks were successful.
An abridged version of the report, highlighting the findings and conclusions, can be downloaded here. For a copy of the full version of the Chargebacks report, please click here.
Guide to Chargebacks
CFA member the Consumer Credit Law Centre (NSW) has a useful fact sheet on what to do if you wish to use chargebacks.