Halifax visa debit card chargeback - How long?

[erodingzip]

Does it really take a month or more to get your money back? That [causing problems] seller will probably use it to earn his bank's interest during this time... A couple days ago I phoned up Halifax asking for a chargeback for a online service/virtual goods not delivered - paid on paypal. I've already made a paypal claim and know it will get me no where since they don't cover virtual goods and services.

 

The staff said he filled the form so I didn't need to. I asked to be contacted by phone not by post. How long should I wait before contacting Halifax again to rush them?

[buzby]

No chargeback can be issued.

 

You LOSE the protection of this when using PayPal, as you made payment to an intermediary. Any representations will need to be made to PayPal and a claim made on their indemnity, which will be refunded to your PayPal account (and then to your card).

[UnderWater]

No chargeback can be issued.

 

You LOSE the protection of this when using PayPal, as you made payment to an intermediary. Any representations will need to be made to PayPal and a claim made on their indemnity, which will be refunded to your PayPal account (and then to your card).

 

This is totally false.

 

When you use a credit card to fund a PayPal transaction you do not -- in any case -- lose your original chargeback rights with your card association.

 

You have several choices with a credit card funded PayPal transaction gone wrong:

 

1. You can refuse to go through the PayPal claim process and directly file a chargeback with your card issuer;

 

2. You can go through PayPal's claim process and, if successful, there is no need for a chargeback; or

 

3. You can go through the PayPal claim process and, if unsuccessful, then file a chargeback with your card issuing bank.

 

According to Visa, MasterCard and American Express, chargebacks can take up to 6 months or longer to be finally resolved depending on whether PayPal contests them or not. A relatively simple chargeback that PayPal does not contest can take approximately 1 - 2 months before you see a permanent credit to your card statement.

 

I seriously doubt that PayPal will contest a chargeback for virtual goods since all card associations' rules specify that merchants have no recourse with virtual goods transactions.

[buzby]

Welcome to CAG.

 

As to your comment, I can only say.....Really?

 

'Chargeback' is a facility that exists because the Merchant making the debit has - for one reason or another - not complied with the provisions of the cardholders request.

 

Unfortunately, the funds are paid to a third party, and as such are EXCLUDED from 'chargeback' arrangements. It is left to the cardholder to pursue the intermediary (whether it be PayPal, Google Checkout, Protix or any of the many, many merchant intermediaries). In other words, there is NO right of set off.

 

In support of this, I suggest you ask yourself this - if a chargeback is made againsr PayPal, why do they unsportingly pursue the cardholder with debt collectors? As to yourcard holder assertion that 'virtual goods' are somehow in a Cinderella land of non-compliance, can you point me to any Merchant regulation that specifically excludes such use? Online betting springs to mind, as does the unlocking of software, all do not provide for the supply of 'physical goods'.

 

Rather than state blandly my assertions are 'false' - check your facts, but better still - why not ask the Merchants themselves? Payments made through intermediaries are a totally differnet ballgame.

Edited April 15, 2009 by buzby

[UnderWater]

Really?

 

'Chargeback' is a facility that exists because the Merchant making the debit has - for one reason or another - not complied with the provisions of the cardholders request.

 

Unfortunately, the funds are paid to a third party, and as such are EXCLUDED from 'chargeback' arrangements. It is left to the cardholder to pursue the intermediary (whether it be PayPal, Google Checkout, Protix or any of the many, many merchant intermediaries.

 

In support of this, I suggest you ask yourself this - if a chargeback is made againsr PayPal, why do they unsportingly pursue the cardholder with debt collectors?

 

Rather than state blandly my assertions are 'false' - check your facts, but better still - why not ask the Merchants themselves? Payments made through intermediaries are a totally differnet ballgame.

 

Yes, really. Your assertions are false ... totally false.

 

First of all, when you enter into a transaction with a merchant and pay with a credit card funded PayPal payment, the merchant of record is PayPal, not the original merchant. If the original merchant does not complete the order, it is PayPal that has the ultimate responsability for the transaction. If PayPal can then obtain recourse with the original merchant, so much the better. If, however, PayPal cannot, then they bite the bullet as a cost of doing business as they are the merchant of record for credit card acceptance purposes.

 

Let's surf on over to www.paypal.com. Click on the link at the bottom of the page entitled and then further click on the link entitled .

 

PayPal's User Agreement specifically and unequivocally validates the facts as I have presented them.

 

1. Preamble: "Please note the following risks of using the PayPal service:

Payments received in your PayPal account may be reversed at a later time for example, if such a payment is subject to a Chargeback, Reversal, Claim or otherwise invalidated. This means that for some of our sellers, payments received into their Account may be returned to the sender or otherwise removed from their Account after they have been paid and/or delivered any goods sold."

 

2. Clause 13.9: "Relationship between PayPal’s protection programs and Chargebacks

 

Credit card chargeback rights, if they apply, are broader than PayPal’s protection programs. Chargeback rights may be filed more than 45 days after the payment, may cover unsatisfactory items even if they do not qualify as SNAD, and may cover intangible items.

 

You may pursue a Dispute/Claim with PayPal, or you may contact your credit card company and pursue your chargeback rights. You may not pursue both at the same time or seek a double recovery. If you have an open Dispute or Claim with PayPal, and also file a chargeback with your credit card company, PayPal will close your Dispute or Claim, and you will have to rely solely on your chargeback rights.

 

If PayPal does not make a final decision on your Claim until after your credit card issuer's deadline for filing a chargeback, and because of our delay you recover less than the full amount you would have been entitled to recover from the credit card issuer, we will reimburse you for the remainder of your loss (minus any amount you have already recovered from the seller).

 

Before contacting your card issuer or filing a Dispute with PayPal, you should contact the seller to resolve your issue in accordance with the seller’s return policy as stated on their auction or website."

 

Not only are your assertions shown completely false, but also the logic you used to reach those false assertions can be found -- should you delve a little deeper into the PayPal user Agreement -- is defective.

 

I have personally had two chargebacks against PayPal merchants that were ultimately resolved in my favor. I will attempt to attach screen shots of the PayPal Resolution Center to document this.

 

Meanwhile, you should apologize to the original popster for providing such a negligent answer.

 

Regarding my statements concerning virtual goods, I shall return shortly after locating relevant excerpts from Visa, MasterCard and American Express' chargeback manuals.

[buzby]

Look forward to it.

 

Whilst you're at it - have a look at what 'financial intermediary' actually means. As far as the banks are concerned, if the intermediary does not default, then no chargeback will be issued.

 

Your copious rendering of what PayPal might or might not do was wonderful, however - you continue to miss the point. If a customer asks his card issuer to reverse a transaction because of some problem (and the rules are totally different depending on whether a credit or debit card is used - something I note you've not bothered to differentiate) the issue is how the card company will treat the request, and setting aside any bank error - of which there are many - there is to right of set-off of a third party transaction.

 

So, as you continue to avoid the salient points, and the true-life experiences of CAG members who have actually been in these situations, please feel free to bury your head in manuals if you wish. I prefer to stick with what actually happens.

[stockport]

Thanks very much for your reply, this had helped me to file chargebak with the Visa issuing Bank

[buzby]

Do let us know what PayPal do....

[UnderWater]

Look forward to it.

 

Whilst you're at it - have a look at what 'financial intermediary' actually means. As far as the banks are concerned, if the intermediary does not default, then no chargeback will be issued.

 

Your copious rendering of what PayPal might or might not do was wonderful, however - you continue to miss the point. If a customer asks his card issuer to reverse a transaction because of some problem (and the rules are totally different depending on whether a credit or debit card is used - something I note you've not bothered to differentiate) the issue is how the card company will treat the request, and setting aside any bank error - of which there are many - there is to right of set-off of a third party transaction.

 

So, as you continue to avoid the salient points, and the true-life experiences of CAG members who have actually been in these situations, please feel free to bury your head in manuals if you wish. I prefer to stick with what actually happens.

 

Amazing. Your denial of the truth shows no bounds. Is this an integrity issue or one where you are just completely ignorant of the facts?

 

I have shown two actual chargebacks. Unlike you, I am not confused. I specifically included these two examples of chargebacks with my credit & debit cards since I am well aware that the original poster's issue is a debit card chargeback.

 

So to reiterate, on one hand we have you -- and only you -- claiming there is no right to chargeback with PayPal transactions. On the other hand we have, Visa, my bank, original poster's bank, PayPal and >6,500 Google hits documenting untold thousands of PayPal users who have had their funds taken back by PayPal because of credit & debit card chargebacks.

 

Visa, Inc.:

 

November 8th, 2008: Visa Debit Chargeback process initiated.

 

MasterCard Chargeback Manual:

 

Message Reason Code 4855 - Nonreceipt of Merchandise

 

For a Debit MasterCard purchase with cash back transaction, an issuer can submit this chargeback only for the purchase amount, or a portion thereof. The issuer must submit the First Chargeback/1442 message with a Function Code of 453 (Partial Amount). An issuer must not submit a chargeback for the cash back amount, or any portion thereof, using this reason code.

-------

Feel free to refer to Visa & MasterCard directly -- as I have done -- to har their response that:

 

- Although timeframes may be unequal (i.e. shortened), debit card products with the Visa logos have the same chargeback rights as credit card products.

 

- MasterCard debit card products have long enjoyed the same chargeback rights as our credit card products. Due to operational considerations, there may be differences in time frames for certain chargeback categories.

 

Please look up the definition of the terms delusional, incompetent and dishonest. Do you even have a credit much less a debit card?

[UnderWater]

As to your card holder assertion that 'virtual goods' are somehow in a Cinderella land of non-compliance, can you point me to any Merchant regulation that specifically excludes such use? Online betting springs to mind, as does the unlocking of software, all do not provide for the supply of 'physical goods'.

 

]I seriously doubt that PayPal will contest a chargeback for virtual goods since all card associations' rules specify that merchants have no recourse with virtual goods transactions.

 

I think in addition to the operating procedures of the various credit card associations, you also have issues with reading comprehension. Nobody said it was not possible to use a Visa / MasterCard / American Express card product for the purchase of virtual goods. The fact is that merchants have much less recourse for virtual goods transactions when a chargeback is initiated.

 

American Express:

 

American Express Inquiry & Chargeback Policy and Procedure Guide for Merchants

 

Full Recourse Chargebacks/Non Compliance Chargebacks

 

In certain circumstances American Express debits disputed charges without sending an inquiry contact. For example, Merchants with high inquiry rates or conducting transactions in what are considered risky business environments may be required to accept full recourse on all inquiries. No inquiry is sent to you and all Cardmember disputes are

immediately charged back.

 

Internet Electronic Delivery

 

If a dispute arises involving a Card-Not-Present charge that is an Internet Electronic Delivery transaction, we will exercise immediate Full Recourse.

 

Certain types of transactions are prohibited on the Card. These transactions include:

 

• Gambling services, gambling chips or gambling credits as well as online gambling.

 

High Risk Mail, Phone and Internet Procedures

 

Any time you process a transaction in which the Card is not present — you run a greater risk of fraud. American Express has designed safety procedures specifically for these situations. When processing Card not present transactions, always ask for:

 

• Card billing address, as well as the shipping address (if different from billing address). American Express recommends shipping to the Cardmember’s address. Shipping to the billing address is necessary to avoid Full Recourse based on a Cardmember’s dispute of the Charge.

 

* Or you can actually call AmEx. You do have an AmEx card, right? And a telephone?

 

=====

 

Visa Operating Regulations. Volume 2 (Disputes)

Visa chargeback reason code 30

Chargeback Condition 2

 

Cardholder or authorized person did not receive ordered merchandise.

 

Chargeback Rights

1. For an Electronic Commerce Transaction, prior to exercising the

Chargeback, Issuer must verify that Cardholder attempted to resolve the dispute with the Merchant.

 

Representment Rights

None

 

=====

 

MC Chargeback Guide

3.28: Message Reason Code 4855—Nonreceipt of Merchandise

 

The following sections describe the proper and improper use of message

reason code 4855.

 

Second Presentment: Condition

 

The acquirer can substantiate that the merchandise was delivered.

Supporting Documents Proof that the cardholder or person that the cardholder authorized received the merchandise. For example:

 

• A signed and imprinted sales slip, invoice, or terminal-generated point-of-interaction (POI) receipt showing that the cardholder, or a person that the cardholder authorized, picked up the merchandise. This documentation proves that the card acceptor did not ship or deliver the merchandise.

 

• Proof that the cardholder received the merchandise or a person authorized by the cardholder received the merchandise. For example, the card acceptor provided proof of a United Parcel Service (UPS) receipt.

It is important to note that proof of shipping is not suffieient. Delivery must be proven by signature to prevail in an arbitration chargeback.

 

A lot of people are not well versed in how credit card operations are carried out and they come here looking for truthful, solid advice. Those of us who are clued, have the duty to steer them in the right direction.

 

Those of you who are clueless should try to get a clue before spewing misonformation.

[Prolix]

The notion of a chargeback follows the same principles of those found in Section 75 of the Consumer Credit Act. Here the creditor (card issuer) is jointly liable for breaches of contract along with the supplier. There are therefore 3 parties to this contract Debtor/Creditor/Supplier.

 

One view of a transaction involving Paypal is that they are the effective supplier of electronic money. So as long as Paypal does their bit and forwards the payment to another party then the contract is complete and the banks do not therefore entertain S75 compalints involving Paypal. The Financial Ombudsman Service supports this view. (The following is a wider issue discussed between the Financial Ombudsman and FSA at www)

 

Another view is that there has to be goods involved for S75 and Paypal do not sell goods themselves so in effect they are acting more like merchant acquirers (see OFT v Lloyds). So, If a supplier accepted paypal and a debtor used a credit card then there would be pre-existing arrangements between creditor (the bank via paypal) and the supplier and therefore S75 does apply. (INTERNET PAYMENT SYSTEMS AND CON)

 

These arguments haven't been tested in court, yet.

 

Now we get on to chargebacks. Where chargeback rights exist ie for credit card holders under S75 (visa for example) then it is industry practice to apply chargebacks for debit card holders where there are arrangements is place. So because there is a sheme for Visa Credit Cards then it has been best practice to apply it to Visa Debit cards too. This is not a legal entitlement as S75 is.

 

This from the FOS:

 

chargeback

Customers often misunderstand how credit cards work. If they use a credit card in a shop, they think the firm which issued the credit card (the card provider) then pays the shop. That is not how it works. Outlets where credit cards can be used are signed up by a separate firm (the merchant acquirer).

This is how it works:

• The firm which provided the cardholder with the credit card is known as the card provider. It belongs to a credit card network such as Mastercard or Visa.
  
• The shop or the business is known as the merchant. It has signed up with a merchant acquirer which belongs to the same credit card network as the card provider.
  
• The merchant claims its money from the merchant acquirer. The merchant acquirer claims its money from the card provider.
  

Effectively, each credit card network is an electronic form of clearing system – coupled with a delay before the cardholder has to settle up with the card provider.

If the card provider (on behalf of the customer) claims the money back from the merchant acquirer (on behalf of the merchant), that is called chargeback. The rules of the credit card networks lay down when and how this can be done.

There is no express contractual obligation imposed on a card issuer to exercise chargeback rights on behalf of an account-holder. However, industry acceptance of the custom of processing all disputed transactions as chargebacks, where a chargeback right exists, is so common that the ombudsman has determined that it is good practice to chargeback.

Therefore, our view is that if an account-holder disputes a transaction and chargeback rights exist under the relevant card scheme operating rules, the card issuer is required to:

• Process all disputed transactions as chargebacks, where chargeback rights exist.
  
• Take care in exercising any chargeback right. This would include using the most appropriate reason code for the chargeback, so that the account- holder’s reasons are properly represented, and properly completing chargeback documentation under the relevant card scheme.
  
• Satisfy itself that the response to the chargeback, given by the merchant acquirer, is a proper response to the situation
  

 

So, Mr Underwater, whilst your comments, like my own, tend towards prolixity they are not explaining the full legal position, but seem to be repeating internal rules and guidlines from financial institutions. And that is not the same as letting people know what the law says which is "truthful, solid advice"

[erodingzip]

Do let us know what PayPal do....

 

Well my chargeback was issued by my bank and paypal is still taking its time to investigate. I received a letter saying my bank returned the amount to the retailer for investigation, and that the retailer has told them he declines my claim.

 

So my bank's credited my account while waiting for the outcome and said they need to debit my account at their specified date.

 

The retailer's told paypal that it's an intangible service and was delivered. Bah, I can send paypal screenshots of my email inbox to prove he never delivered the service I paid for because he went arguing with me. He's even threatened paypal to take his business elsewhere if they refuse to 'protect him from chargebacks and fraud'. I'm the one who lost money and now I'm getting labelled a fraud. I'm really ****ed off now.

 

I contacted my bank's visa debit card department and they told me visa debit cards do not protect consumers like credit cards do. They said if the seller refuses to refund me they can't force a refund with a visa debit card.

Edited May 23, 2009 by erodingzip