Our investigation

We reviewed the card provider’s rules and considered chargebacks were not limited in the way the bank said they were. We contacted the card provider, Mastercard, which confirmed it would usually look at chargeback requests in circumstances such as Dominic’s. It added that the probability of success at arbitration was low. We concluded the bank acted wrongly by not initiating the chargeback when Dominic asked.

We considered the probability of the bank successfully recovering the money was quite high, although not certain. If the merchant had not responded to the chargeback, the funds would have been recovered. However, the merchant didn’t respond to Dominic’s complaint so we thought it possible it wouldn’t have responded to the chargeback either (although there is a financial incentive to do so). In light of these factors, we said the bank should compensate Dominic 75 per cent of the value of the transaction, or $5,775.

Outcome

Dominic and the bank accepted the proposal.