Cardholder Dispute

A cardholder dispute occurs when a cardholder challenges a charge on their account, asserting that the transaction was unauthorized or otherwise incorrect. This formal complaint initiates a chargeback process, where the cardholder's issuing bank reviews the claim to determine its legitimacy and decides whether to reverse the charge and refund the cardholder.

Cardholder disputes are a protective measure for consumers, allowing them to seek redress in situations such as:

While these disputes are intended to protect consumers from fraud and breaches of contract, they can sometimes be misused. Some disputes are filed under false pretenses or misunderstandings, where the cardholder might not recognize a legitimate transaction or might try to abuse the chargeback process to obtain a refund undeservedly.

To resolve these disputes, the issuing bank investigates the claim by requesting information from both the cardholder and the merchant. If the dispute is deemed valid, the charge is reversed; if not, the original transaction is upheld. This process is governed by regulations set forth by card networks and requires careful documentation and timely response from all parties involved to ensure a fair resolution. Handling disputes efficiently and fairly is crucial for maintaining trust and satisfaction among consumers while protecting merchants from fraudulent chargeback claims.