SINGAPORE: The Consumers Association of Singapore (CASE) has unveiled a basic chargeback guide to protect consumers against disputed transactions involving their credit cards.
In a consumer advisory on Monday (Nov 27), CASE said there has been a "lack of clear and specific directions" for consumers on how to file a chargeback application online. Hence, it has compiled a guide based on the guidelines of major international credit card providers and local banks.
Chargeback protection allows credit card users to dispute a charge and reverse a transaction if a purchase does not go through in the event of business insolvency, CASE said.
Consumers who pay by credit card can ask for a chargeback within 120 days of the date of transaction for non-delivery of goods and services, delivery of unfit goods and services, transaction errors and/or unauthorised transactions, CASE said.
This is typically important for purchases involving beauty or travel packages, fitness club memberships, home renovation services, as well as big-ticket items such as cars and furniture.
If these businesses become insolvent, consumers, as "unsecured creditors", have "little chance" to recover their repayment, CASE said.
Upon submission of the chargeback claim, the card issuer will investigate to determine if the claim is valid. If the card issuer determines that the chargeback is valid, the card issuer will proceed to initiate a chargeback with the acquiring bank, CASE said.
Consumers with disputes involving credit card transactions can visit their card issuer’s website or contact their card issuer directly for more information on the chargeback procedure.
However, CASE highlighted that the option to recover prepayments by requesting for a chargeback may not be available for those who purchased goods or services with their credit cards under instalment payment plans.
This is because the card issuer had already made full payment to the business on behalf of the consumer, CASE said.
Consumers are still liable to continue paying their instalments to the card issuer unless the business agrees to terminate the instalment plan and refund the bank.
CASE added it wants "to strongly urge all card issuers to provide a step-by-step guide on how to lodge a chargeback claim prominently on their websites".
More details on the basic chargeback guide can be found on CASE's website.