How to retrieve funds using a chargeback
In some cases where you have paid for a service, or goods, or an investment you may be able to approach your bank or credit card company for a chargeback.
What is a chargeback ?
A chargeback is similar to a refund, however there is a significant difference: instead of contacting the business for a refund, you are asking the bank to forcibly take money (charge-back) from the business’s account.
This is a consumer protection measure that the banks have set up so that funds can be returned to conusmers in the event of things like fraud.
How does a chargeback work ?
The bank initiates an investigation, and if the bank feels the cardholder’s request is valid, funds are removed from the business owners account and returned to the customer.
The customer is not obligated to return whatever was purchased. But in the case of a scam, or fraud, there is a legal obligation for the banks to listen to their customers and take action.
What can you get a chargeback for ?
Chargeback is not provided for fiat (cash) to crypto-currency transactions, as this is not considered to be legal tender.
Instead, a chargeback is provided for these types of transactions:
- Use of a credit card to pay the business (or scamming organisation) directly, without going through a crypto provider platform
- Depositing cash from your own bank account into the business (or scamming organisation) bank account directly
Both of these methods are valid to be able to request a chargeback from your bank.
If you paid money from your bank or credit card into a crypto wallet, and then transferred bitcoin (or other crypto currencies) to the fraudulent company, this is not able to perform a chargeback.
What’s the catch with chargebacks ?
There is only one catch with a chargeback – whether it is from a credit card or bank – and that is, you have a limited time from the date of purchase to make a claim. The time period can be from 60 to 120 days, depending on which bank system you are with.
The earlier you contact your bank and ask them about a chargeback, the better the chances you have to get your funds back.
What information do you need to provide for a chargeback ?
Your bank or credit card company will likely request the following information:
- Date of the transaction
- Amount you paid
- Currency of payment
- Transaction Id of the payment sent
- Name of the receiving business / organisation / person
- The nature of your purchase
- An explanation of why you didn’t receive your purchase
- Why you consider it to be fraud
How long does it take for a bank to assess your claim ?
A bank can typically take up to 2 weeks to process a chargeback claim – if it takes longer then get back in contact with them and ask them when they might consider they will have an outcome to your request.
Conclusion
If you plan to make purchases or investments online, always try to use a credit card, or bank transfer, to deposit funds. Avoid paying by bitcoin or other cryptocurrencies as there is very little chance of getting any money back.
If it turns out that the business or organisation or individual is fraudulent, then you can contact your bank or credit card provider and ask them for a chargeback, and your funds are likely to be returned after an investigation has taken place.