ARN and Refund

houman1979

Hi,

I paid for a service by a card and later asked to cancel and refund it.

The issue is that the account I used to pay for that service was closed and so the card does not exist anymore.

Sender claims that the refund has been successful and gave me a long number called ARN number.

On the other hands, the bank has been investigating the issue for a long time and each time they say something to me.

Now, my question is what is this ARN number? Does it really show that the refund was successful?

Thanks

pochisoldi

houman1979 wrote: »

Hi,

I paid for a service by a card and later asked to cancel and refund it.

The issue is that the account I used to pay for that service was closed and so the card does not exist anymore.

Sender claims that the refund has been successful and gave me a long number called ARN number.

On the other hands, the bank has been investigating the issue for a long time and each time they say something to me.

Now, my question is what is this ARN number? Does it really show that the refund was successful?

Thanks

My first reaction was that ARN is the IATA airport code for Stockholm Arlanda, but the context told me otherwise.

A google for "ARN reference number" which immediately told me:

"Acquirer reference number,(ARN), is a unique number that tags a credit card transaction when it goes from the merchants bank (the acquiring bank) through the card scheme to the cardholder's bank (the issuer). This number can be used by issuing banks to trace a transaction with an acquirer."

Or put another way, when they put through the refund, the merchant got an ARN for that transaction, which they have given to you so you can do their donkey work for them.

PochiSoldi

houman1979

Thank you. So, the issuer is right in saying that ARN shows then refund has been successful?

The bank says the refund would be bounced back as the account was closed and so I need to trace it from the refunding party but they say ARN shows it was successful.

agrinnall

Is this a credit card? If so there are two options:


1. The payment did indeed bounce back to the originator.
2. Your card issuer has the payment in a suspense account but is unable to allocate it to you as your account is closed.


I'm not sure that an ARN would signify one of those rather than the other, I suspect both are possible, although I think 2 is more likely.

Chino

agrinnall wrote: »

although I think 2 is more likely.

Why, when the OP has already been told the following?

houman1979 wrote: »

The bank says the refund would be bounced back as the account was closed

Terry_Towelling

The ARN is a reference number allocated to a transaction when it passes from the retailer's bankers through Visa or MasterCard and on to the card issuing bank - and thence onto the card account.

Digits 2 thru 7 identify the retailer's bank (like a sort code would). Digit 8 is the last number of the year of processing (8 this year). Digits 9 thru 11 represent the day of the year as a sequential number - i.e. 001 is 1st Jan & 365 is 31st Dec. The remainder (excluding the last digit) is an identifier used by the retailer's bank to be able to trace the transaction - at least this is how it was years back when I worked in cards.

I find it hard to believe your issuing bank would simply return (by automated chargeback) a credit on an account that it knows once existed. Of course it may be that their systems are not sophisticated enough to distinguish between a closed account an account that never existed and so an automated return might have happened.

The best people to check this for you are your issuing bank. You need to give them the story involved and the ARN of the refund. This will enable them to locate it in their records and tell you whether they have bounced it back to the retailer's bank or dumped it into one of their suspense accounts. If they confirm they bounced it back, you need them to give you the date it happened (probably the day after it came in) and then you will have to contact the retailer so they can check whether their processing bank has returned the credit to them. You should also give your issuer a rocket for failing to consider the ramifications of such an action on an account it knows was once open and where it is entirely possible that a refund of some prior transaction might be made. It is poor account/systems management on their part unless the time since closure is significant.

Taking it from there is uncertain because the retailer may refuse to issue a refund to any account other than the one from the original sale (for fraud and money laundering reasons). If you can give them a replacement card number they may do something for you.

Beyond that, if they do still have the credit, you may want to ask them for something in writing to confirm their willingness to refund you (quoting both the amount and the card number) and you can ask your Issuer to raise a chargeback for you based on the date of the retailer's written confirmation. To make the chargeback your issuer will need to locate your old account and find the ARN of the original sale transaction.

I strongly suspect if you have to go down this route that there will be resistance, prevarication and ignorance from all parties involved, but it should be resolvable. Let's hope the refund is still with your issuer or, if not, that the retailer is prepared to credit you by some other method.

agrinnall

Chino wrote: »

Why, when the OP has already been told the following?

Because you can't always believe what people on the phones at banks tell you - if you could then half the threads on here wouldn't be needed.

Terry_Towelling

agrinnall wrote: »

Because you can't always believe what people on the phones at banks tell you - if you could then half the threads on here wouldn't be needed.

Agreed (sadly). It would also be the height of irresponsibility for a bank to routinely return card refund transactions on closed accounts when they know that an account did exist with that number on it and when they know refunds always come later than the sales they relate to and must be processed to the originating account.

The very least you should expect (if they do practice indiscriminate transaction returns) is for them to confirm they did it and when - not simply to say, 'oh well, this is what we do'. Not good enough.

houman1979

Actually, I told the story to the Bank and gave them the ARN number. At the beginning they just gave me general replies that they cannot do anything and it has been bounced back but now they said they are investigating it! The other fact is that I have another active account with them and so they can allocate the refund to it.

The refunding party insists that no bounce back happened which is true in my view as it is more than three weeks since the refund.

So, as i understand ARN number shows that the refund was gone through to the card and it may be now in a suspense account. It is more likely as the back office of the bank told me by having ARN they are more likely to resolve the matter. As you said, I assume their system is poorly managed.

Finally, what would be my options if the bank refuses to handle the issue properly?

jonnygee2

Finally, what would be my options if the bank refuses to handle the issue properly?

You can state that you have have been financially disadvantaged because of the level of service you have received, and want to make an official complaint.

They will then have to go through their complaints procedure. This normally gets you access to far more competent and motivated staff to resolve your query. It shouldn't be necessary but with many banks this is the only way to get even simple issues resolved. Most likely the complaints team will find your money and send it back, along with a small 'goodwill gesture'.

At the end of the complaints procedure you would be given the details of the financial ombudsman if you don't feel it's resolved. You can only go to the ombudsman at this point, not before, but its unlikely you will have to for this one.

pmduk

Before things were completely automated, somebody used to be tasked with trying to allocate items that appeared on suspense accounts. Banks now appear happy to let money wait until someone claims it and don't train their call-centre staff adequately with the procedure to claim these funds.