Customer debit card dispute - Andy Zavoina

Customer debit card dispute
by Andy Zavoina, BOL Guru

Question: We have a customer who ordered merchandise over the phone and used her debit card for payment. The merchandise was supposed to be a 30-day free trial; however, her account was charged. She then tried to cancel the order, but they told her it was too late. She has not received the merchandise and a dispute has been filed. In a case like this what is proper procedure? What if the dispute is denied?

Answer: This is a tough situation. Since it is a consumer debit card transaction, Reg E will be the applicable regulation, but Reg. E is generally not concerned with a consumer?s satisfaction with a product or service, but only whether the transaction was authorized or not. The consumer provided the necessary information in this case and was then dissatisfied because she did not receive the product during the 30-day trial. The customer could argue that she did not authorize them to charge the card until after the free trial had been successfully used, but that probably won?t fly.

Had this been a credit card transaction, as defined by Reg. Z, there would be a disputable transaction. When it comes to disputes, customer rights are much greater when there is a credit card involved than when there is a debit card involved.

First published on BankersOnline.com 5/10/04