Here's What Happens When You Lose a Credit Card Dispute (2024)

One of the benefits of paying with credit cards is that you have the option to dispute transactions when necessary. You're expected to try sorting the issue out with the merchant first (unless it's fraud). But if that doesn't work, you can file a dispute and attempt to get your money back.

This can protect you in all kinds of situations. If you were billed for a service you canceled, such as a gym membership, you can dispute it. If a product you ordered arrives damaged, or doesn't arrive at all, you can dispute it.

When you dispute a charge, the card issuer will contact the merchant and investigate. If you have a valid dispute, and you provide enough information, the dispute will most likely end in your favor. However, there are situations where card issuers side with the merchant.

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I have some firsthand experience in this situation, and I know how frustrating it can be. Whether you just lost a credit card dispute, or you're curious about what would happen, here's what to expect.

The charge goes back on your credit card

When you first dispute a transaction, your card issuer gives you a provisional credit for it. You don't need to pay that charge while the dispute's in process. If you win, then the provisional credit becomes a full reversal of the charge.

If you lose your dispute, then the charge goes back on your credit card bill. You'll be expected to pay it, just like any other transaction. Even if you don't think it's valid or that you should be required to pay it, you are. If you refuse, you'll be charged late fees, and the non-payment will negatively impact your credit score.

The card issuer will send you a letter explaining the decision

You'll receive this letter in the mail, and it will likely also be available online in your credit card account. The letter will explain why your card issuer found in the merchant's favor. For example, if you didn't receive a product you ordered, and the merchant provided tracking information that confirmed delivery to your address, the dispute may be closed in its favor for that reason.

You can take it further with an appeal or an official complaint

Losing a dispute isn't the outcome anyone hopes for. If you think you have a valid case, there are still a few options available to you.

The first option to pursue is filing an appeal. Check with your card issuer about how to do this, and make sure to provide any further information or evidence you have to support your case. Sometimes, explaining your side better and sending more evidence, can get your card issuer to decide in your favor.

You could also file a complaint with a consumer protection agency. Here are a few options:

  • Consumer Financial Protection Bureau (CFPB)
  • Federal Trade Commission (FTC)
  • Your state's consumer protection agency

You'd be surprised at how effective a complaint to the right agency can be. I once lost a $582 credit card dispute for a Booking.com rental, where the home was nothing like the pictures or description. During the dispute process, I offered to send my photo and video evidence, but a Chase representative told me that they didn't use that type of evidence.

That turned out to be incorrect, and by the time I found out I could provide evidence, it was too late to do anything. So, I filed a CFPB complaint. Chase reviewed the call recordings, learned that I had received incorrect information, and credited me the full $582. Consumer protection agencies are no joke, and businesses do follow up regarding these complaints.

Winning your credit card dispute the first time around

You can appeal a dispute if you lose, but ideally, you won't need to do that. Here's how to give yourself the best chance of a successful dispute:

  • Contact the merchant first. Unless it's a fraudulent transaction, you're expected to try working it out with the business. If you and the merchant can't come to an agreement, that's when you can file a dispute.
  • Make sure you have a valid claim. There are lots of reasons you can file a dispute, including billing errors, quality issues, and unfulfilled orders. But some situations don't qualify. For example, if you only have buyer's remorse, you're unlikely to be successful with a dispute.
  • Gather evidence. Look for any evidence you can find to support your case. Let's say you rent an apartment that's nothing like the listing. Take screenshots of the listing, and take pictures of the rental you received to demonstrate the difference.
  • Provide all your information and evidence when you file the dispute. It's better to give your card issuer all of this from the beginning. You don't want to end up going through an appeal because your card issuer didn't fully understand the issue or think that you provided sufficient proof of your claim. If you have trouble doing this online, call the number on the back of your card and submit your dispute by phone.

Disputing a credit card charge isn't something most people need to do too often, so you may not be familiar with the process. If you do all of the above, the odds will be in your favor.

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Here's What Happens When You Lose a Credit Card Dispute (2024)

FAQs

Here's What Happens When You Lose a Credit Card Dispute? ›

If you lose your dispute, then the charge goes back on your credit card bill. You'll be expected to pay it, just like any other transaction.

Do you usually win credit card disputes? ›

This can't always be helped. You might not always get a fair outcome when you dispute a chargeback, but you can increase your chances of winning by providing the right documents. Per our experience, if you do everything right, you can expect a 65% to 75% success rate.

What happens if your dispute gets denied? ›

If your dispute is denied, then the charge will go back on your credit card. You're legally entitled to an explanation about why your dispute was denied and how you can appeal the decision. Your credit card company will likely send you both the explanation and instructions on how to appeal in writing.

What happens if you lose a chargeback? ›

For merchants who have lost their chargeback dispute during any of the three cycles, or decided not to contest the chargeback, they are out the money from the sale, the product sold, plus any fees incurred. Once a merchant loses a chargeback, the dispute is closed and they can't petition any further.

What happens if you don't win a chargeback? ›

If your claim is refused and you don't get your money back, contact your card provider as they may be able to give you more details about why this has happened. If you're not satisfied with this, you may be able to refer your dispute to the Financial Ombudsman Service (FOS).

Do credit card companies actually investigate disputes? ›

What does the credit card company have to do? They must acknowledge receipt of your letter within 30 days. Within 90 days or two billing cycles, they must investigate your dispute.

What happens if you falsely dispute a credit card charge? ›

Filing false chargebacks can lead to legal repercussions, as it can be deemed as fraud. If a cardholder knowingly disputes valid transactions to evade payment, they could face criminal charges, fines, or even imprisonment.

What happens if you lose a credit dispute? ›

If you lose your dispute, then the charge goes back on your credit card bill. You'll be expected to pay it, just like any other transaction. Even if you don't think it's valid or that you should be required to pay it, you are.

Do credit bureaus really investigate disputes? ›

The Fair Credit Reporting Act (FCRA) is the federal law that, among other rights, gives you the right to dispute incomplete or inaccurate information on your credit reports. The credit reporting company must take steps to investigate the dispute when you notify them of an error.

How many times can you dispute? ›

While there's no limit on disputes, if you send a dozen in the same week or month, you run the risk that credit reporting agencies might see you as someone who's frivolous with disputes. Make sure all your disputes are grounded in facts and that you provide documentation to back them up.

Who loses money in a chargeback? ›

Filing a chargeback means the cardholder is attempting to bypass the merchant altogether by asking the bank to intervene. Successful disputes mean the merchant loses the revenue from the sale, plus the value of the merchandise. They'll also forfeit any overhead costs like shipping, fulfillment, and interchange fees.

Can you fight a lost chargeback? ›

Merchants are then able to dispute said chargeback by submitting a rebuttal letter and documented evidence in a process called representment. After the representment process, the card issuer reviews the evidence and determines a ruling based on the merits of the claim.

Do you need proof for a chargeback? ›

To win the dispute process and recover lost revenue, you must present what's called “compelling evidence," or proof that you had all rights to charge the disputed amount from the credit card that was provided to you. Note: every chargeback dispute is different and requires custom-fit evidence to prove the case.

How do I make sure I win a credit card dispute? ›

The best way to resolve a credit card dispute is to address the issue directly with the merchant, and to seek a resolution before escalating the dispute to the credit card issuer and by providing all relevant documentation to support your case if the dispute needs to be formally filed.

How often do merchants win credit card disputes? ›

Chargeback Win Rate

On average, merchants win approximately 32 out of every 100 chargebacks they decide to contest. This means that if you're a merchant dealing with 100 chargebacks, you can typically expect to successfully recover funds from around 32 of those disputes.

Can you win a credit dispute? ›

Luckily, federal law gives you the power to dispute errors on your credit report and get them corrected. At Ware Law Firm, we regularly help clients remove damaging inaccuracies from their credit history. With the right strategy, you can successfully dispute credit report errors and improve your score.

How common are credit card disputes? ›

More than 70 million disputes were filed in 2019, Visa said in a presentation, before rising 24% in 2020 during the pandemic and about 2% a year in 2021 and 2022. Despite being easy for consumers to file, making it one of the most-common credit card frauds, disputes are an opaque part of the payments industry.

References

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