We have had a customer call and want to dispute a debit card transaction. There is a local gym that has closed three locations in the area and our customer was in a contract for a year, but only singed up 2 months ago. She said they told her that her membership could be used at other locations that haven't closed but those are 15-20 miles away. She paid for a whole year up front using her debit card. I think she needs to refer to the contract to see what it says about this situation. Part of me thinks this is between the customer and the gym but part of me thinks the customer can dispute it because they did authorize the charge but didn't receive the product. Any opinions would be welcome.

Thanks

It's not an authorized transaction under Reg E. She authorized the use of her card.

David, did you mean that it is not an unauthorized transaction?

I'll proxy for David and say he meant to say it's not unauthorized. There's some chance that Visa/MasterCard rules will allow a dispute, but I tend to agree with Hogfan -- it's 'tween the merchant and the cardholder.

Yep. I did mean "Unauthorized". Sorry for the confusion.

Thanks John!

Although VISA/MasterCard provide for chargeback rights if a customer does not receive the product, that doesn't apply she. She is choosing not to drive to the other locations to receive the product so VISA/MasterCard protections do not apply here, either.

Had the gym gone bankrupt and closed ALL locations, again Reg E would not apply, but you could file a chargeback for services not received on the prorated 10 months of the contract that were not fulfilled.