Response to a section 75 claim

Terry_Towelling

eco_warrior wrote: »

MSE could really do with correcting that article. It littered with inaccuracies. In my opinion of course.

I don't have the time or stamina to go through the article, but I glanced at some of it. Something I found quite odd was the £10 minimum amount for MasterCard Chargebacks. Of course, I can understand that the MC CB rules may have this stipulation built (as a cost saving measure) but the way the article is written suggests you cannot dispute a MC transaction less than a tenner. That is wrong.

You dispute a transaction whenever you have grounds to do so. Your expectation should be that you will have the amount refunded by your issuer (even if it is under £10) as long as your dispute would otherwise have (validly) qualified for a Chargeback. The issuer should simply write-off the amount.

That is certainly the approach we used to take with low-value disputes even before minimum CB amounts were introduced. You do, of course need to keep tabs on your Cardholders' dispute patterns though as they may start to dispute anything under £10 thinking it will be written off without investigation!

eco_warrior

Terry_Towelling wrote: »

I don't have the time or stamina to go through the article, but I glanced at some of it. Something I found quite odd was the £10 minimum amount for MasterCard Chargebacks. Of course, I can understand that the MC CB rules may have this stipulation built (as a cost saving measure) but the way the article is written suggests you cannot dispute a MC transaction less than a tenner. That is wrong.

You dispute a transaction whenever you have grounds to do so. Your expectation should be that you will have the amount refunded by your issuer (even if it is under £10) as long as your dispute would otherwise have (validly) qualified for a Chargeback. The issuer should simply write-off the amount.

That is certainly the approach we used to take with low-value disputes even before minimum CB amounts were introduced. You do, of course need to keep tabs on your Cardholders' dispute patterns though as they may start to dispute anything under £10 thinking it will be written off without investigation!

I think there may be some disputes, Visa ones, that have limits like this. Certainly none I can think of with MasterCard.

I know RBS wrote off small chargebacks, prob under £10/£15. Where I work we have no threshold in place as the fee for winning a dispute is a source of income.

Terry_Towelling

eco_warrior wrote: »

I think there may be some disputes, Visa ones, that have limits like this. Certainly none I can think of with MasterCard.

I know RBS wrote off small chargebacks, prob under £10/£15. Where I work we have no threshold in place as the fee for winning a dispute is a source of income.

Back in the days when Visa had a special rule set (including CB rules) for T&E Merchants, there was a $25 minimum CB amount. There was no fee paid for a successful CB in those days (although it had been mooted a few times).

Visa also used to calculate the cost of the average CB at $25 in those days. That was one of their reasons for dropping the Second CB process. Their business case included the number of saved 2nd CBs multiplied by $25 as a benefit. What they didn't really consider (despite being told) was the fact that the (cheap) 2nd CB would end up being replaced by the very expensive Arbitration process. I think they felt the threat of Arbitration penalties early on was enough to police the CB process and stop banks trying it on.

I left just after the new rules were implemented, so never got to see what actually happened to costs or arbitration levels.

eco_warrior

Terry_Towelling wrote: »

Back in the days when Visa had a special rule set (including CB rules) for T&E Merchants, there was a $25 minimum CB amount. There was no fee paid for a successful CB in those days (although it had been mooted a few times).

Visa also used to calculate the cost of the average CB at $25 in those days. That was one of their reasons for dropping the Second CB process. Their business case included the number of saved 2nd CBs multiplied by $25 as a benefit. What they didn't really consider (despite being told) was the fact that the (cheap) 2nd CB would end up being replaced by the very expensive Arbitration process. I think they felt the threat of Arbitration penalties early on was enough to police the CB process and stop banks trying it on.

I left just after the new rules were implemented, so never got to see what actually happened to costs or arbitration levels.

Now I think about it MasterCard had some additional rules about T&E merchants. I’m sure the limits were much higher though, maybe $250. Anything smaller was a write off so those were very easy claims! Changed days now.

born_again

As to limits on c/b. As such as far as Visa goes there are no lower or upper limits.

But each card provider may impose their own limit where it is not cost effective to action a chargeback. In that case they will simply refund the customer.

Monkey_B

.PS: Hobbird would you be willing to reveal the card provider who gives you such prompt service?

My one and only Section 75 claim was for a phone ordered online that never turned up (a two minute trustpilot search would've revealed the company's true nature - lesson learned!). I had used my Santander issued MasterCard, so called Santander who refunded me within a couple of weeks with no fuss whatsoever.

lr1277

Many thanks Monkey_B. Admittedly a few years ago, I didn't see much good stuff on this site about Santander so have never considered them for any financial product. I will now consider them based upon your report.
Thanks.

born_again

Monkey_B wrote: »

My one and only Section 75 claim was for a phone ordered online that never turned up (a two minute trustpilot search would've revealed the company's true nature - lesson learned!). I had used my Santander issued MasterCard, so called Santander who refunded me within a couple of weeks with no fuss whatsoever.

Why would santander action S75 (which means they pay you) when there is a chargeback right, which means the money comes from the retailer?

Terry_Towelling

born_again wrote: »

Why would santander action S75 (which means they pay you) when there is a chargeback right, which means the money comes from the retailer?

I think the problem with public perception is that S75 is all that exists for handling card disputes. People jump to a S75 claim but don't realise the card issuer is performing a simple chargeback behind the scenes.

To be honest, it shouldn't really matter how you frame your dispute with your issuer, as long as they take the appropriate action and you get your money back when you should.

However, some issuers seem to handle S75 claims in a way that is entirely independent of any other dispute mechanism. Any card issuer worth its salt should handle S75 and Chargeback disputes in parallel and within the same back office team.

We have had stories on this forum of Issuers taking their own sweet time to reject a S75 claim when a Chargeback right existed but the Chargeback time limit had expired whilst the S75 claim was under review and the issuer then refused to refund the customer. To my mind that is crass mismanagement by the issuer, but then, not all card issuers are created equal.

born_again

It should be down to the card issuer to decide the best way to take any dispute forward. As they are the experts.
The number of time people argue "I want a S 75 claim NOW" is amazing. Most are not happy when they are told how long it may take compared to a chargeback. Also no money back till resolved, unlike a c/b which is usually refunded in a matter of days (subject to being redebited if fails)
Our's are handled by different teams due to the experience involved in the different reasoning required.
A failed chargeback will then move onto the S75 team, without any customer action.

As you say. Different card providers will have different views on how long and how they deal with disputes.