Chargeback in Case of Fraud: How Money Recovery Works

[Evgeny Lebedev]

In recent years, the number of financial fraud cases has been rapidly growing. Users of online services, cryptocurrency exchanges, pseudo-brokers, and online stores are particularly vulnerable. In such situations, a chargeback becomes one of the few effective tools for recovering funds. This article explains in detail how the chargeback procedure works in cases of fraud, what to pay attention to, and which mistakes could jeopardize your chance of getting your money back.

When Is a Chargeback Needed?

A chargeback is a cardholder-initiated procedure for forcibly reversing a transaction through the issuing bank. It allows customers to dispute a transaction and recover their money if the goods or services were not provided as agreed or if the buyer fell victim to fraud.

Typical situations where a chargeback may be initiated:

• Unauthorized charges without the client's consent.
• Services not provided or only partially delivered.
• Sale of counterfeit or misrepresented goods.
• Fraud by brokers, crypto platforms, or investment projects.
• Automatic service subscription renewals without clear notification.

It is important to understand that a chargeback is not a "customer wish" but an official legal procedure that requires evidence.

How the Chargeback Procedure Works: Step-by-Step Process

The process of recovering funds through a chargeback involves several stages:

• Contacting the merchant: Before submitting a claim, the bank requires confirmation that you tried to resolve the issue directly.
• Collecting evidence: Correspondence, website screenshots, contracts, service advertisements, and payment receipts — all are crucial to building your case.
• Submitting the request to the bank: An official claim is filed with the issuing bank, including all collected evidence.
• Forwarding the request to the payment system: The bank sends the request to Visa, MasterCard, or another network.
• Inter-bank investigation: The merchant has the right to present a rebuttal, and the customer's bank may respond accordingly.
• Decision: If the claim is upheld, the funds are returned to the customer's card.

The review period can range from 30 to 120 days, depending on the payment system and case complexity.

What Increases the Chances of Success?

The chances of a successful chargeback greatly increase with swift action and well-prepared documentation. It is crucial to submit the request within the designated timeframe — usually within 120 days of the transaction date. A complete and clear body of evidence — screenshots, correspondence, contracts, receipts — significantly boosts the likelihood of a favorable outcome. Additionally, a well-crafted claim, presented briefly, logically, and without emotion, is important. Clients should be ready to respond to the bank's follow-up requests and provide additional documentation if needed. Active participation, attention to detail, and strict adherence to payment system requirements dramatically increase the probability of success.

Major Mistakes That Can Prevent Recovery

Even in clear cases of fraud, a chargeback may be denied due to client errors. The most common mistakes include missing the claim deadline and providing insufficient evidence. Sometimes clients fail to attempt a direct resolution with the merchant, thus violating a mandatory procedural stage. Incorrectly specifying the reason for the refund, mistakes in claim preparation, or incomplete information can also be fatal. Additionally, negotiating partial refunds directly with the merchant without bank involvement can eliminate the possibility of a chargeback. A careful approach to every stage of the application process is crucial for successful fund recovery.

Conclusion: Chargeback in Case of Fraud

A chargeback remains one of the most effective ways to recover money lost to fraud. However, its success depends on timely action, the quality of evidence, and strict compliance with the requirements of banks and payment systems. Understanding the nuances of the procedure and paying close attention to detail significantly increases the chance of recovering lost funds, even in complex situations.