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Bank Liability for Double Charge DC Dispute

Answered by: 
Brian Crow

Question: 
We have had instances where customers have filed debit card disputes after a merchant charged them twice for the same item. In most cases, the customer informs us that the merchant swiped the card and received a denied message and then swiped the card a second time and the authorization cleared. The customer then finds that the first authorization also cleared and they are then debited twice, but the merchant claims they only received payment once. Does the Bank always lose in this instance? Can we keep $50 from the customer due to liability?
Answer: 

Since this transfer is not the result of a lost/stolen access device, the $50.00/$500.00 liability tiers of Section 1005.6(b)(1) & (2) do not apply. If this is truly an electronic funds transfer error, the customer will have no liability.

However, there is no reason for the bank to accept liability for a merchant error. Using VISA/MasterCard chargeback procedures, you can recover the funds from the disputed charge from the merchant.

VISA issuers should file chargeback code 82 "Duplicate Processing" and MasterCard issuers chargeback code 4834 "Duplicate Processing" For both card brands, the issuer should include the Acquirer Reference Number (ARN) for the first completed transaction and file the chargeback on the second. If it is truly a duplicate, the bank will win the claim. If the cardholder did make two seperate purchases, the merchant will provide copies of both sales receipts, invoices, proof of delivered merchandise, etc. This can be used as grounds to deny the claim and revoke the provisional credit.

First published on BankersOnline.com 6/10/13

First published on 06/10/2013

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Filed under operations as: 
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