There are many differences between a debit and a credit card. One of them is that debit cards do not have the same consumer protections as credit cards. Therefore, disputing a debit card charge is more challenging than for a credit card.
When you dispute a credit card purchase, the timing can still give you have the opportunity to withhold payment.
In a debit card, you’ve technically already paid for the purchase and your bank will have to decide whether or not to restore funds they have already been taken from your account.
You have a better chance of success in a debit card dispute if you act fast and are able to present shreds of evidence such as a receipt.
When Do You Dispute a Debit Card Charge?
Any time you have a disagreement with a merchant or contest about a charge they made to your debit card, this qualifies as a cardholder dispute. Some examples:
You initiated and subsequently canceled a transaction but the merchant still charged you for it. For example, you reserved a hotel room online and later canceled it in accordance with their cancellation guidelines – but the booking website still charged you for the room.
You purchased an item through your debit card but later returned the item to the merchant but they never returned the money you’ve paid back into your account.
The merchant charged you an erroneous amount for a purchase. For example, they debited $500 instead of $50.
You have an issue with the quality of the products or services that the merchant provided.
Fraudulent Debit Card Transactions
Technically, a fraudulent transaction is one where you, as the cardholder, do not know who used your card and can declare with absolute certainty that you have no knowledge of such transaction.
The bank will require you to sign an affidavit stating that you are not aware of who made or completed the transaction(s) in question. (see example here). But take note: the bank will not tolerate individuals who file a false or unsubstantiated fraud claim. In fact, they may even charge a fee or penalty for doing so.
The Differences Between Disputes and Fraud
The basic distinction to know whether a transaction is fraudulent or disputable is whether the cardholder knowingly or willingly made the transaction with the merchant in the first place.
There are many reasons why a dispute may arise between a cardholder and a merchant. Some of them are: overcharging the cardholder, charges for undelivered merchandise or continuous charging for a subscription that the cardholder has already canceled.
If the cardholder has never initiated or authorized a transaction which the bank processed, the cardholder may file for a fraud claim.
Credit Vs Debit Card Chargeback
Let’s face it: between a problem with a debit card purchase and one with a credit card, you’re more likely to have better success in a dispute with the credit card. You enjoy better consumer protection as a credit cardholder and you’d be able to keep the money you spent in your account while threshing out the problems with the merchant. But don’t lose hope. In a debit card purchase, you can file a dispute and you might be able to get your money back.
As a credit cardholder, you have the right to dispute a charge when there is a billing error or other issues that you can’t work out with a merchant. The law provides you with these rights through the federal Truth in Lending Act and the Fair Credit Billing Act.
With credit cards, you have the right to withhold repayment to the credit card company for any purchase on which you file a dispute after a merchant refuses to resolve a problem with their goods or services.
Here are some cases that would call for a dispute:
You ordered an item and it never arrived. For example, you ordered a camper trailer tent for $600 from an online camping equipment store but they never delivered the item to you.
The merchandise they delivered was defective or not the same as described. For example, you ordered a 21-speed bike on display in a store. When your order arrives, it has substitute cheap parts and not the original parts like the one on display.
The merchant charged you more than the stated price. For instance, you bought a high-end bag on sale at 35% off but the merchant charged you for the full amount and refuses to refund the supposed discount.
However, for a debit cardholder, the law does not provide the same protections. Consumers who experience similar problems with their debit card purchases still have recourse with their concerns. If you file a dispute over a debit card charge, it is incumbent for your bank to look into the matter.
How to Dispute a Debit Card Charge
If you find a charge on your bank account statement that you are not familiar with, immediately check if it matches your card use or spending. Thieves will often try with small purchases and if the account holder does not notice or fails to act, they will follow up with a large purchase. You can always check a charge against the named merchant on your statement and match it with your past purchases.
When you want to dispute a charge, you have to call your bank and ask it to cancel the error so that they can restore the balance of your account back to its previous level. But do take note that it may take the bank up to 10 business days to make a final decision. You can make your request through the bank’s customer service hotline.
The bank usually posts the number on their website or at the back of the card itself.
Report the fraudulent charges immediately and don’t forget to provide as much detail as possible.
For example, provide a copy of the receipt that shows a different price from what the merchant charged you or show that a purchase has been made at an online store where you have not created an account.
Follow up Your Dispute With a Written Letter
Even if you’ve called the bank and talked with a customer service representative, follow up your dispute with a written letter. Make sure you indicate your bank account information, your name, your report reference number (if the customer service rep gave you one), when you first noticed the fraudulent charges and when you first reported them.
If you want a sample letter, you can go to the website of the Federal Trade Commission . Keep a copy of all documents that you send to the bank and write down the times and dates of all the follow-up calls and messages you make.
You would find it more difficult to dispute a charge if you’ve lost or compromised your PIN or if thieves were able to guess it. An authorized person who uses your correct PIN or card security code or makes it appear that you’ve authorized the purchases.
In general, PIN purchases are more difficult to dispute than purchases that you sign for.
Choosing to process your debit card transaction as a signature-based credit card purchase will force your bank to follow the dispute rules set by the credit card companies. This could offer you better consumer protection and get a favorable decision quickly if you support your argument with evidence such as purchase receipts.
Should You Cancel Your Debit Card?
You may not need to cancel your debit card if it’s just one fraudulent transaction that you’re disputing or when the merchant overcharged you for an authorized transaction. If you want to protect yourself from being exposed to fraud, just change your PIN.
However, if you suspect that your personal information has been compromised, canceling the card might be a lot better. An indication that thieves have stolen sensitive info is if you notice multiple transactions are showing up over a short period of time.
Before you cancel your debit card, you might want to update your details with merchants that have your saved card information. These are merchants where you have online subscriptions or where you have automatic payment agreements such as a monthly subscription fee for New Chapter.
In the case of subscriptions, you will have to contact each merchant to update your information details before the cut-off date for payment so that your products, services or access will continue.
How to Increase Your Chance For a Successful Debit Card Dispute
A debit card dispute can come out for or against your favor – there’s no guarantee that you will be successful all the time. However, there are steps that you can take to increase your chances. Here are 3 of them:
Get in touch with the seller first
Regardless of whether you used a credit or a debit card, you may be able to resolve the issue if you deal directly with the retailer or service provider first.
Remember that most merchants look at their customers as their lifeblood and would want to retain their business by keeping them satisfied.
Always be reasonable.
Customers that a chargeback is a remedy when the merchant is in the wrong and not in cases when customers simply changed their mind about the purchase they’ve made.
If you buy something and then you decide you don’t like the color, you need to take that up with the merchant.
Be prepared to prove your case
When you file for a dispute to your bank, you should be able to clearly show why they should decide in your favor by providing compelling evidence to support your claim.
For example, you might include a copy of the receipt that shows the merchant charged you $199 for an item that they advertised in an online catalog as $99. Or provide them with a service contract or emails from the merchant promising a refund that never came or a photo of the defective item.