Debit Card Dispute Services Not Rendered

Posted By: reknab

Debit Card Dispute Services Not Rendered - 01/07/21 06:44 PM

I know Reg E does not cover satisfaction of service, and I think we should have denied this customer right off the bat, but he's one of those customers who will get a lawyer if he doesn't get what he wants. He did some research and said that MC rules allow 120 days for a chargeback for services not rendered and he wants his money back. I think this may be correct for credit card, but not debit. Customer opened dispute on 10/13/20 for a transaction that posted on 7/1/20. Transaction was authorized, but he was not satisfied with the service. I want to deny the dispute and move on. What can you tell me about MC/120 days rule? Is that for credit cards only? and where can I find that in writing to provide to my customer? Thank you!
Posted By: BrianC

Re: Debit Card Dispute Services Not Rendered - 01/07/21 10:56 PM

Mastercard extends all chargeback rights to all card types. In the case of services not rendered the 120 day clock starts ticking from the later of the transaction date or the promised completion date of the services not to exceed 540 days from the transaction date. This extra time allows for a customer that may prepay for materials (e.g for a home improvement project) with an expected completion date in the future that extends beyond 120 days.

Bottom line, as a Mastercard issuer you have a contractual obligation to assist your cardholder. Since Reg E doesn't apply, you can require that the cardholder jump through all of Mastercard's hoops including contacting the merchant and writing a detailed dispute letter stating what was supposed to be provided and when, what was actually provided, and the results of the attempt to contact the merchant including the merchant's response.
Posted By: Andy_Z

Re: Debit Card Dispute Services Not Rendered - 01/08/21 09:30 PM

Correct me if I'm wrong, but the bank has to assist, but that doesn't mean the bank will eat the loss?

That's a huge difference between the MC contract and Reg E requirements backed by the EFTA.
Posted By: BrianC

Re: Debit Card Dispute Services Not Rendered - 01/08/21 10:53 PM

Correct. The bank attempts to assist, but if the chargeback is not successful, then the cardholder is out the money.