Susan became suspicious and in July 2025, she contacted the bank and asked it to dispute the transactions and reverse the charges. The bank submitted chargeback requests, but the merchant challenged them and the chargebacks were not successful.

Susan complained that the bank mishandled her chargeback requests. She also complained about how the bank dealt with her requests for help with interest, fees, repayment options and hardship, and about not having a single point of contact.

Our investigation

We reviewed the bank’s telephone calls with Susan about the payments. The bank’s fraud systems had flagged the payments as high risk. Each time, the bank stopped the payment, blocked the card, contacted Susan and explained that the payments had been flagged as high risk. It asked questions about the merchant and the purpose of the transactions and warned Susan about the possibility of fraud. Susan repeatedly told the bank she was buying gold as an investment and wanted the payments to proceed. In these circumstances, we found the bank acted appropriately in processing the payments.

We looked at the bank’s handling of Susan's chargeback requests. When a customer asks for a chargeback, a bank should act fairly and reasonably by checking whether there is a possible ground under the card scheme rules to seek a chargeback. If the request appears to fall within an applicable ground, the bank should initiate the chargeback.  

The bank responded promptly to Susan's request, asked for further information, and then lodged a chargeback under an appropriate chargeback ground. When the merchant rejected the chargeback request, the bank gave Susan opportunities to supply more information, and it later pursued the chargeback under another chargeback ground.  

We were satisfied that having identified a further possible applicable chargeback ground, it was reasonable for the bank to try to pursue the chargeback further. It was also reasonable for the bank to have advised against arbitration because the fees were high (US$600 per transaction) and it was unlikely to succeed. We found the bank met its obligations in the way it handled the chargeback process.

We also reviewed the bank’s communications with Susan after her chargeback was unsuccessful. The Code of Banking Practice requires banks to communicate clearly and effectively. We found the bank’s communications about when the provisional credits would be reversed were clear, although we found repeated communication failures when Susan sought help from late August 2025 onwards about interest, fees, repayment options and a possible hardship application. She was passed between teams and received inconsistent and sometimes incorrect information. The bank did not clearly explain why hardship assistance was not available, and it tried to take the full card balance when Susan understood only the minimum payment would be taken. Taken together, we found these repeated communication failures were a breach of the bank’s obligation to communicate clearly and effectively.

We recommended that the bank reimburse interest it had charged on the dishonoured payment and that it pay Susan $750 for stress and inconvenience.   

Outcome

The bank and Susan agreed with our recommendation and the bank paid $750 to Susan and reimbursed interest it had charged on the dishonoured payment.