Monday, January 28, 2008

Notes from the Bank Card industry I

So, I figured I should add several helpful blogs to go along with my rants. The job that I work is in the banking card industry. In lay terms, credit cards.
Now, the actual way that the credit card industry works is far different than what the average person knows. I know I didn't know about it. So, I'll be sending out a few helpful notes here and there.

Now first, a little about the actual company that I work for. We are a "merchant processing center". That is to say, when you run your card through that credit card machine at your favorite clothing shop, SOMEONE has to collect that information, transmit it to your bank, initiate the debit to your account, and then transfer the money into your merchants bank account. This is why most credit card sales don't appear on your statement for a day or two. The SOMEONE I meantioned before, that would be the company that I work for. Well, I work for one of the many companies that perform this service.

Now, contrary to what you might be thinking, this is not a post just for the merchant, but also for the consumer. So I encourage people to pay attention. This first post will actually be focused for the cardholder.

You there, with the credit card IN YOUR HAND. Did you know that you have a lot more power, protection, and control than is commonly believed? Let me explain. There is an action that many people are not familiar with. It is called a "chargeback". A chargeback is when you go to your bank and tell them there is an unauthorized charge on your account, and your bank sends the charge back to the merchant. Clever naming convention. Anyway, here is the part that most cardholder's do not know.

By Visa and MasterCard's rules and regulations, a cardholder has the right to dispute any transaction that appears on their statement.

Read that line very carefully. Now, you might be saying "I went to my bank once with a problem and they told me that I could only file a dispute up to 7/15/30 days after the transaction." Yeah, I've heard all that before. My response to you is this. Your bank lied to you. This is a Visa/MC rule. The reason your bank tried to disuade you from placing a chargeback... because it costs them money. Your typical chargeback has a time frame between 60 and 120 days. There are some, albeit very rare, occasions where you can initiate a chargeback on your account up to 18 MONTHS from the time of the transaction.
Also, if a transaction appears that you just aren't sure of, if it is valid or not, you also always have the right, up to 18-24 months after a transaction, to go to your bank and ask that they procure the receipt for you. This is called a retrieval request, and is also your right by Visa/MC.

Now, here is where you have the power. The burden of proof, and do pay very close attention to that wording, is on the merchant. And the proof that Visa and MasterCard require, is always hard copy documentation. After saying that, I want to let you all know what I am not doing.

I am NOT (please read that word underscored, starred, highlighted, in bold 800 pt font in your brain) encouraging you to dispute every transaction, good or bad, on your account to get out of it. Yes, the merchant has to prove the transaction, and yes you technically could do that, and possibly get some valid transactions taken off your account. However, just because you won the chargeback, does not mean that the merchant cannot fight back, either through court or collections, to get their rightful compensation. And I guarentee you that the information they have is probably strong enough to stand up in a court of law, even if rejected by Visa.

What I am encouraging you is this. Know your rights. As a cardholder, if you think there are charges on your account that genuinely should not be there, know that you have the right by Visa and MasterCard to dispute it.

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