There is no doubt that online credit card fraud is a popular means of parting people from their cash as it is anonymous, difficult to prove and poorly protected. Here’s how you can protect yourself.
Regularly Check Bank & Credit Card statements
It is imperative that you check your bank and credit card statements for purchases you haven’t authorised. If you don’t recognise the transaction you should identify the merchant to see what has happened without delay.
It is possible that you don’t recognise the alias the company is using, but you will often find a telephone number next to the transaction.
Call the Merchant
Just call to see if it is a company you have used recently and what was purchased as it may clarify matters for you. It is unlikely that the merchant will refund your money directly due to the risk of chargebacks.
What is a Chargeback?
A chargeback occurs when you report an online debt or credit card fraud to your bank and they debit the money fraudulently appropriated from the merchant’s account.
Chargebacks are definitely the friend of the consumer and the onus rests heavily on the merchant to prove that it was you who made the transaction. This is incredibly difficult to prove because it is a Card Not Present (CNP) transaction.
Report Any Fraud to Your Bank & Commence a Chargeback
Online fraud protection is limited, but merchants are financially responsible for any losses you incur. If you are the victim of fraud don’t be fobbed off by what the merchant tells you, go straight to your bank and tell them that you didn’t spend the money.
Although some banks allow customers 2 years to chargeback, it is really important that you do this within 6 months of the disputed transaction appearing.
Online Gambling Fraud
The majority of claims are in relation to online gambling problems. Many people lose money online and then seek to chargeback and get their losses returned. Whilst a number of claims are genuine, the majority are erroneous.
Merchant Challenge of the Chargeback
Merchants are given 10 days to challenge the chargeback. Most challenges are made on the basis of an existing, long term relationship with the customer and the information that they hold about you is correct.
Almost all challenges are unsuccessful because it is so difficult to show that it was indeed you who made the transaction, especially for online gambling transactions.
How Long Before the Money is Returned?
It can vary regarding how long it takes to get any money returned. Some will credit the money back within a few days, although they will debit it again should a merchant challenge be successful. It is advisable not to use any money returned until you are certain that the money is again yours.
Other banks will carry out investigations to see if there are reasonable grounds for not allowing a chargeback. Although the banks don’t pay the money back, they make the decision and some banks are more vigilant than others due to the number of false claims they receive.