How are banks able to get your money back after a credit card chargeback?

Question

You purchase a product, but it doesn’t work or you don’t even get it. So you open a chargeback. How are banks able to just claw back the money you’ve sent?

In: Economics

Answer 1

Something nobody has mentioned yet: there is a Federal law that provides consumer protections for credit card transactions. Specifically, you’d want to look at the Truth in Lending Act and its implementing regulation, CFPB Regulation Z. The protections are complicated, but they establish a right for consumers/cardholders to dispute unauthorized charges and billing errors, to sue the card issuer (under certain circumstances) if the merchant won’t resolve an issue, and to get a resolution to their claim within specific time frames.

For those who are curious, take a look at

12 CFR 1026.12 (https://www.consumerfinance.gov/rules-policy/regulations/1026/12/)

and

12 CFR 1026.13 (https://www.consumerfinance.gov/rules-policy/regulations/1026/13/)