Chargeback Rights: What Consumers Need to Know
Understanding your chargeback rights as a consumer, including federal protections, time limits, and when you can and cannot file a chargeback.
What Is a Chargeback?
A chargeback is a reversal of a credit card or debit card transaction initiated by the cardholder's bank. Chargebacks were created as a consumer protection mechanism to safeguard cardholders against unauthorized transactions, billing errors, and merchant disputes.
Your Rights Under Federal Law
The Fair Credit Billing Act (FCBA) protects credit card users by allowing them to dispute charges for billing errors, unauthorized transactions, and charges for goods not received or not as described. The Electronic Fund Transfer Act (EFTA) provides similar protections for debit card transactions.
Time Limits for Filing
For credit cards, you generally have 60 days from the statement date to file a dispute for billing errors. For debit cards, reporting within 2 business days limits your liability to $50. After 2 days but within 60 days, your liability increases to $500. After 60 days, you may be liable for the full amount.
When You Can File a Chargeback
Valid reasons for a chargeback include unauthorized transactions (fraud), charges for goods or services not received, charges for items significantly different from what was described, duplicate charges, and incorrect charge amounts.
When You Should Not File a Chargeback
Chargebacks should not be used as a way to avoid a legitimate charge or when you simply change your mind about a purchase. Filing invalid chargebacks (sometimes called friendly fraud) can result in your bank closing your account and may have legal consequences.