What is the Chargeback scheme?

It is an arrangement offered by your debit, prepaid or credit card provider that can get you a refund if something goes wrong when you spend on your card.

You can get your money back through:

  • Your bank or building society if you use a debit card

  • Your credit card provider

  • Your prepaid card provider

What transactions does Chargeback cover?

It covers purchases of almost any value made on your card. You can use it to get your money back if:

  • A purchase does not arrive

  • The company you buy from goes bust

  • Goods or services are not as described or are in an unsatisfactory condition

  • You are charged more than agreed for a purchase or are charged more than once

  • Your card is used fraudulently

You can only use it if the retailer refuses to give you a refund or is unable to help.

How much can you get back?

You can claim back the full amount you have lost. For example:

  • If you order a phone worth 250 and it does not show up, you could claim 250

  • If you were charged 450 for a 250 phone, you could claim 200 back

There are no limits if you have a Visa or American Express card. MasterCard have set a minimum claim amount of 10, so purchases for less than 10 are not covered.

Is it the same as Section 75?

No, the Chargeback scheme plugs the gaps in Section 75's protection by offering:

  • Protection for debit card and prepaid card transactions

  • Protection for credit card transactions of any value, whereas Section 75 only works if your purchase costs 100 to 30,000

Unlike Section 75, the Chargeback scheme is not enforced by law. It is a voluntary agreement between credit card providers and card issuers (Visa, MasterCard and American Express), who set the scheme rules.

The following card types offer Chargeback protection:

Credit cardsDebit cardsPrepaid cards
VisaVisaVisa
MasterCardMasterCardMasterCard
American ExpressVisa Electron.
.Maestro.

Transactions not covered by Chargeback

You can only use the scheme if you paid on your card - not if you withdraw cash and use that to pay for something.

You cannot claim if too much time has passed or you bought through some third parties like PayPal.

Time limits

To make a Chargeback claim you will need to contact your card provider within their time limit - usually 120 days after discovering the problem.

If you made the purchase in person, the 120 day period starts from the date of the transaction.

With online purchases, this date is usually the delivery date of your order.

The time limit on making your Chargeback claim depends on which company issue your card:

  • MasterCard: You need to start your claim no more than 120 days after your transaction went wrong

  • Visa: Within 120 days of the transaction going wrong (or 180 days for an overseas transaction)

  • American Express: Within three months of the transaction

You can claim after these periods if you bought a service that will be used in the future, like flights or concert tickets. In these cases, the time limit would start from your flight's departure date or the date of the concert, although you would need to claim within 540 days of when you paid.

Using PayPal

The Chargeback scheme does not usually apply when you use PayPal because your card transaction is with PayPal rather than the seller.

If you use PayPal and do not receive your goods or services as promised, you can claim by opening a dispute through PayPal.

If this does not work you may be able to make a claim through the Chargeback scheme. However as there is no legal obligation to return your money, the outcome will be up to your card provider.

How to make Chargeback claim

Keep hold of...

Proof of the transaction like receipts, online order confirmation or your bank statements.

First you need to try to resolve the issue with the retailer before you can complete a Chargeback request. Contact them by phone, post, email or in person to try to get your money back.

If the retailer refuses to give you a refund, you can start a Chargeback claim:

  1. 1.

    Contact your provider (by phone or by visiting a branch) and tell them that you want to make a claim through the Chargeback scheme

  2. 2.

    Give full details of the transaction you want refunded

  3. 3.

    If required, provide them with copies of any correspondence you had when you tried to get your money back from the seller, including letters emails and records of phone calls.

Some banks will ask you to complete a claim form, but others just take details of the transaction and start the claim for you.

Does your bank know what Chargeback is?

The person you speak to at your bank may be unaware of the Chargeback scheme because it is not as well known as Section 75 protection.

If so, ask to speak with a supervisor or suggest they check with a manager, who can tell them the procedure for the Chargeback scheme.

How long will it take to get your money back?

When you raise a Chargeback request, your bank should let you know how long it will take.

This will vary depending on which bank you use and how straightforward your claim is.

Some banks will re-credit your account straight away, but reserve the right to take the money back if your claim is unsuccessful. Others will investigate the claim before crediting your account.

What if your claim is rejected?

If your request is rejected you are entitled to be told why.

If you feel that their decision is unfair you can complain to the bank. If they still refuse your claim you have six months to take your case to the Financial Ombudsman, who may overturn the bank's decision.

However, you cannot take your bank or card provider to court because offering the Chargeback scheme is not a legal requirement.

You can get more help and advice on making a complaint from the Resolver website.