How long do you give customers to dispute debit card transactions where they claim they failed to receive the services they were charged for and have repeatedly contacted the Merchant to no avail?

This customer has been in communication with the Merchant for attempting to rectify the problem and receive their money back for the past 3 months and while the Merchant has constantly informed they are working to correct the problem, to date they have not. So, under Reg E is the customer still able to dispute the charges?

Thanks

p.s. I would think the answer is yes as they have been engaged with the merchant and attempted to correct the situation.

Since the customer authorized the original charge, and the correct amount came out of their account, Reg E does not apply to this situation.

However, VISA/MasterCard rules do have options available for you to be able to help your customer. The chargeback time frame for this situation is 120 days after the latest promised delivery date of the merchandise not to exceed to 540 days after the date of the transaction.

What this means is that you can go back 3 months to file a chargeback on the disputed charge. File MasterCard chargeback code 4855 "Goods or services not provided" or VISA chargeback code 30 Member message 2 "Merchandise not received." In order to refute the chargeback, the merchant must provide proof that they have provided the merchandise to the customer. If they cannot, they lose the dispute and you will have recovered the funds for your customer.

Also note that although Reg E does not apply, VISA/MasterCard require that you provisionally credit your customer's account once you file a chargeback.

Add a little extra to the scenario and assume the merchant has told the consumer there will be a refund of $x.xx. When that doesn't show up on the consumer's statement, now there's a Reg E error correction claim (EFT missing from statement).

John....can we require that the customer submit documentation from the merchant that the customer will receive a refund....or must we go solely by the customer's word on this?

You can ask. You can't require it. But you can certainly put your request in terms of "If you have something from the merchant that says you are supposed to get a refund, we can expedite your claim. Otherwise, we will need to try reaching the merchant ourselves to confirm you were promised a refund."

Thanks, John.