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sleepingnightmare27 karma

The life cycle of a chargeback claim:

  1. This is only for credit/debit card purchases (payments via check fall under the UCC instead of the regulations listed below)

    A. Person notifies bank of desire to charge back funds B. Bank employee locates a chargeback code asking a series a questions (If they cannot locate a valid reason they won’t conduct the chargeback) C. Regulations B and Z require a provisional credit of funds within 24 hours from the complainant’s bank for valid chargeback complaints D. Complainant’s bank notifies the merchant’s bank of the chargeback request and provides them with a dispute window E. Merchant’s bank fails to respond and funds are swept by the merchant’s bank from the merchant’s account F. Complainant’s bank is reimbursed for the provisional credit provided

Some caveats: this is the life cycle of a successful chargeback. If the merchant chooses to argue the chargeback, there are many steps involved.

Banks don’t fear CoS or any other religious entity. This is just transactional data going back and forth with little to no emotion. Banks will issue credits and not bother processing a chargeback with the merchant if it falls below a certain dollar amount threshold. It simply isn’t worth the effort for a bank to pay an employee to conduct the chargeback.

Source: worked in bank fraud and risk for many years for large financial institutions

Fun facts:

  1. A majority of chargebacks for large banks are a result of the following activities: Accounts with pornographic purchases, fitness memberships, and satellite tv services.

  2. Over 250,000 claims of this nature are processed on a monthly basis by large financial institutions.

  3. Attorneys working for large financial institutions don’t typically become involved with claims even for $12,000.

  4. If there is no money in the merchant’s account, the bank takes it as a loss and typically writes it off against fee GLs. Bank fees collected offset the cost of this process.

sleepingnightmare3 karma

Have you done any studies on narcolepsy?