Chargebacks are the reversal of charges made to your credit card, and even though they are a basic right based on American legislation dating back almost half a century, the practical application of these rights vary considerably among the different card networks. We will discuss here some of the idiosyncrasies of the chargeback system as executed by Visa, Inc.
Like Mastercard, Visa too is a multinational corporation headquartered and based in the United States. For that reason, its rules and policies need to comply with American regulations and laws. In addition, on a local level Visa chargeback rules will often be tweaked for compliance in many other countries or jurisdictions for cardholders, issuing banks, or transactions in those locations.
The main American legislations that led to chargebacks as we know them are the Fair Credit Billing Act of 1974 and the Electronic Fund Transfer Act of 1978. Due to some fine legal distinctions, the former affects consumer rights with respect to credit cards while the latter pertains to the use of debit cards.
Practically speaking, however, for greater simplicity and transparency, Visa in most cases does not distinguish between Visa debit card chargeback rights and those for a credit card.
Since their introduction and evolution to their present form through the 1960s and 1970s, Visa and Mastercard have been arch-rivals. They have been in a virtual arms race, trying to win over the market with tactics varying from points and bonuses to specialty cards appealing to all kinds of interests, hobbies, and careers. Their efforts haven’t borne much fruit, however, at least not in terms of competition between the two giants. From the point of view of the cardholder, the two networks are virtually equivalent. Indeed, there are far more differences among types of cards within Visa than between Visa and Mastercard. And almost any merchant that accepts Mastercard accepts Visa also (30 million merchants worldwide for Mastercard, and 28 million for Visa).
From the point of view of the consumer, Visa chargeback policy distinguishes between cases belonging to two categories: fraud and consumer dispute.
According to Visa chargeback rules, fraud only applies to cases of unauthorized transactions. Examples include a stolen card or identity theft. This use of terminology may seem somewhat counterintuitive to you. After all, if a merchant purposely misled you and refused to give you what you paid for, you might say that you were defrauded, and you’d be right. But that’s not how the Visa chargeback guide uses the word “fraud,” and therefore that’s not how the bank that issued your card uses it either. So beware when raising a payment dispute over the phone or filling out a Visa chargeback form that you are speaking the same language they are.
The Visa chargeback rules include a number of different scenarios under the category of “consumer disputes.” Among the most common ones are:
These disputes will be handled from a separate department of your bank than the fraud cases mentioned above.
Whether your chargeback is based on fraud or a consumer dispute, your claim will need to be filed under appropriate reason code. The Visa chargeback reason codes take the form of two digits followed by a dot followed by a single digit, and are totally different from the ones used by Mastercard. Visa has four different common codes for fraud, and nine for consumer disputes. Which one is correct for you depends on numerous specific details of your case.
A very important fact to understand and keep in mind is that you only have one chance to raise a chargeback, and if you do it under the wrong category or code, your case may be doomed to failure before it even starts. In case of uncertainty, professional assistance is recommended.
It shouldn’t come as a surprise that you don’t have unlimited time to raise a chargeback. What may be less expected is that exactly how much time you do have can be anywhere from 90 days to as much as 540 days under certain circumstances. The Visa chargeback rules determining deadlines are complex and can be very confusing if you lack broad understanding and expertise pertaining to the Visa chargeback guide.
In general, the Visa chargeback time limit for fraud cases (see definition above) is 90 days from the transaction date. Consumer disputes in most cases have a 120-day deadline, but if your case is between 120 and 540 days, it may still be valid, but again, the rules and details are very involved.
If you have a complex Visa payment dispute, contact MyChargeBack for a free, no-commitment fund recovery consultation.