How long does it take for a bank to dispute a charge?
While many cases can be resolved quickly, some are more complex and can take up to 90 days. During our investigation, we may work with the merchant through their bank, including at times exchanging written documents. That's why U.S. Bank provides provisional credit, while we research and resolve the dispute.
The cardholder's bank will review and decide the dispute outcome. This can take up to 3 months.
| Dispute Win Likelihood Ranking | Chance of Winning the Dispute |
|---|---|
| 5 dots | 60% |
| 4 dots | 40% |
| 3 dots | 25% |
| 2 dots | 15% |
The investigation begins when potential fraud is identified, either through customer claims or the bank's fraud detection system. Investigators analyze transaction data, looking for fraud indicators such as location data, timestamps, and IP addresses.
Each network has different chargeback dispute rules and timeframes, but the deadline is typically 20 to 45 days after the merchant is notified. The entire chargeback process can take up to 120 days.
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.
If the dispute is still not resolved, customers can seek legal advice and file a case.
The bank will determine if the charge in dispute is valid or invalid. They will notify the cardholder and merchant of their decision. If the dispute is determined to be valid, the cardholder will typically receive a refund.
Cardholders have the right to dispute a credit or debit card transaction if it was unauthorized or illegitimate. If a transaction is disputed, the cardholder is no longer required to make payment. Rather, the merchant sacrifices revenue — funds are removed from the merchant's account and returned to the cardholder.
Filing a dispute doesn't affect your credit scores. However, some credit scores might treat items in dispute differently, which could affect your scores while the dispute is being investigated. If the dispute causes a change in your credit report, it might have a positive, negative or no effect on your scores.
Why would a bank deny a dispute?
Why would a bank deny a dispute? A bank might deny a dispute if their investigation finds the transaction was authorized, correctly processed, or falls within the agreed terms of service, indicating no error or fraud occurred.
Your issuer will investigate your claim, give the merchant an opportunity to respond, and decide on the outcome. On the other hand, if you falsely dispute a legitimate transaction, you are committing chargeback fraud and may expose yourself to penalties or sanctions from your issuer.
In the U.S., jurisdiction is extremely important for reporting suspicious activity and bringing charges against potential fraudsters. This can involve state or federal law enforcement agencies, ranging from local police departments to the Federal Bureau of Investigation (FBI).
The merchant is simultaneously notified that they've received a dispute from the cardholders, and that the acquiring bank has debited funds from the merchant account to reimburse the cardholder for the transaction and to cover the fees for investigating the chargeback.
- Don't delay. ...
- Do double-check. ...
- Don't leapfrog the merchant. ...
- Do call your card issuer ASAP if you suspect fraud. ...
- Do be patient. ...
- Don't lose track of paperwork.
Most investigations are completed within a few days. There are more complex investigations that can take up to 90 days to process. When I do receive credit to my account?
The average merchant wins roughly 45% of the chargebacks they challenge through representment. However, when we look at net recovery rate, we see that the average merchant only wins 1 in every 8 chargebacks issued against them.
I am writing to dispute a charge of [$______] to my [credit or debit card] account on [date of the charge]. The charge is in error because [explain the problem briefly. For example, “the items weren't delivered,” “I was overcharged,” “I returned the items,” “I did not buy the items,” etc.].
The most immediate consequence of not responding to a chargeback is the loss of revenue from the disputed transaction.
In an effort to provide better service to customers, though, banks will generally move quickly on disputes. The bank initiates a payment fraud investigation, gathering information about the transaction from the cardholder.
How many days does it take for a bank to resolve a dispute?
Timeline for Outcome
If you do submit documentation, Square's Dispute Resolution Team will take this information and send it to the cardholder's issuing bank. The issuing bank also has a timeline for the dispute process, usually up to 90 days.
Yes, pending payments can indeed be declined, even after they initially appear on your account. This can happen for several reasons: Insufficient Funds: If additional transactions reduce your balance below the required amount for a pending transaction, it can be declined.
A bank has 10 business days to investigate a claim and reach a decision after they're notified. If they confirm the fraud claim is legitimate, they'll refund the customer. Some cases are more complicated, and banks may take up to 45 days for these.
If you file a dispute for a credit card charge with a bank, that bank will quickly notify the corresponding merchant that you've initiated this process. From here, the merchant can review your claim and decide whether or not to accept or deny your dispute.
A customer may dispute a transaction due to a duplicate charge, merchandise that was never received, or fraudulent charges. A chargeback is generally initiated by the cardholder's issuing bank, though it may also be initiated by the merchant. Chargebacks come with fees, which are usually paid by the merchant.
