Chargeback on credit cards: chargeback after fraud

Anyone who discovers transactions on their credit card statement that are due to fraud will quickly come across the term “chargeback” when looking for help. This refers to the reversal of a card payment. The procedure is sometimes presented on the Internet as an easy way to get money back. The reality is more nuanced.

For a realistic assessment, it helps to keep two things apart: the chargeback as a card organization procedure and the legal rights of cardholders according to the German Civil Code (BGB).

What a chargeback is – and what it isn’t

The chargeback procedure is based on the rules and regulations of the card organizations. It regulates the conditions under which the card-issuing bank can dispute a payment against the merchant's bank and charge it back. The banks are primarily involved. Cardholders cannot carry out the procedure themselves, but can only initiate it with their bank by complaining about the transaction.

The chargeback is not a legal claim. Whether and under what conditions a bank is obliged to initiate such a procedure towards its customers depends on the contractual agreements and the circumstances of the individual case and cannot be answered in general terms. The retailer can also object to the chargeback and provide receipts; The result is therefore not certain from the outset.

In which situations a complaint can be considered

The regulations provide for specified reasons for complaints. Typically it involves the following constellations:

• The card was used without the knowledge and consent of the cardholder.
• An amount was charged twice or in the wrong amount.
• A paid product or service was not provided.
• The service differs significantly from what was agreed.

Which proof is required depends on the respective reason. In any case, organized documentation helps: billing, order confirmations, correspondence with the dealer and a brief description of the process.

Unauthorized sales: the legal right to reimbursement

If the card was used improperly, those affected do not have to rely on the chargeback. Section 675u of the German Civil Code (BGB) applies to unauthorized payment transactions: The bank must generally reimburse the amount immediately - regardless of whether it can get the money back from the merchant bank. According to Section 675v of the German Civil Code (BGB), the cardholder's liability is particularly likely in the event of gross negligence, for example if card data and authorizations were passed on carelessly. The burden of proof lies essentially with the bank.

Self-initiated payments, for example to dubious trading platforms

The situation is more difficult if those affected have initiated and approved the card payment themselves - for example, to top up a supposed trading account with a dubious online broker. Such a payment is generally authorized. As a rule, there is no claim for reimbursement under Section 675u BGB, even if the payment is based on fraud.

In these cases, the chargeback can be a possible starting point, for example on the grounds that the promised service was not provided. However, the chances of success are uncertain. Traders often argue that the service was provided when the customer account was credited to the platform. If the money was used via intermediary payment service providers or to purchase crypto assets, the actual fraud is often no longer the subject of the complained payment from the perspective of the card process.

Deadlines and sensible procedure

The regulations of the card organizations and the card conditions of the banks provide for deadlines for complaints. They differ depending on the reason for the complaint and are sometimes significantly shorter than the legal deadline for unauthorized payments. If you wait too long, you risk that the bank will no longer be able to initiate proceedings for formal reasons.

• Check sales promptly and report any abnormalities immediately.
• Submit the complaint in writing and clearly state the reason.
• Attach supporting documents and keep copies of all documents.
• In the event of fraud, also file a criminal complaint.

Conclusion

The chargeback is a useful but limited tool: a procedure between banks, not an enforceable right to a chargeback. In the event of unauthorized transactions, cardholders have their own legal claim under Section 675u of the German Civil Code (BGB). The initial situation is significantly less favorable for self-approved payments; What is important here is an early complaint, a viable justification and a sober assessment of the chances of success.