Bank had no obligation to act on chargeback request without evidence of valid chargeback claim

Categories:

Instructions not followed, Cards,

Summary:

In September 2024, Emmett engaged a business to provide his company with marketing content and services for three months. He paid for the first month in advance using his Visa credit card. A dispute arose between Emmett and the business about two weeks later when it failed to show up for a scheduled film shoot.

Published:

July 2025

The business declined his request for a refund, saying it had produced some marketing content and was able to reschedule the shoot. It pointed out that its contract terms gave him no right to a refund. Emmett asked the bank to dispute the transaction through the card company on the basis that he had not received the service he had paid for. The bank said it could not seek a chargeback on this basis because the business was prepared to complete the service, but Emmett rejected this explanation and cancelled the service. Emmett said he had negotiated a verbal agreement that he could cancel the service if the business did not provide any part of the service – including the film shoot – on time. The bank replied that it could not seek a chargeback without evidence of this extra term. In the absence of some proof that the business had agreed to refund Emmett if it failed to deliver on time, the bank said it could not proceed with a chargeback request. Emmett asked us to investigate.

Our investigation

The rules for chargebacks for service or refund not provided require specific evidence be provided to support claims. Banks only have an obligation to process a chargeback request if a valid claims exists.

While Emmett contended that the business had failed to provide the service by not attending the film shoot, there was no evidence that was the date for delivery of the service or that the business had otherwise failed to provide the service. In fact, the evidence showed the service would be provided over the three month period. There was also no evidence that the business had agreed that Emmett would be entitled to a refund if the business failed to attend the film shoot. Without the evidence required by the rules, the bank could not seek chargebacks on the basis that the business had failed to deliver the service or failed to refund Emmett. While we were investigating his complaint, Emmett took the business to the Disputes Tribunal for breach of contract. The tribunal ruled in his favour, but we did not consider its finding to be evidence we could rely on to alter our findings of fact in this case.