Chargebacks Follow-up Inquiry

The CCMC is pleased to release its report of its follow up inquiry into banks compliance with their obligations in relation to Chargebacks under the 2004 Code of Banking Practice and the information they provide to consumers about their right to request a chargeback. 

This follow up inquiry was conducted to determine whether the recommendations made in the 2011 Chargebacks Inquiry Report had been adopted by Code subscribing banks and whether there had been a corresponding improvement in banks’ practices.

The results of our real time testing though mystery calling suggest that banks who implemented some of the recommendations from the 2011 Inquiry have benefitted in terms of improved compliance rates. The CCMC however encourages subscribing banks to consider how best to improve information provided to consumers about their rights, the Chargebacks dispute process and where to find other information about Code obligations in this area.  Providing accurate and timely information to consumers regarding how to request a chargeback will have a positive effect on that individual’s financial position, should improve customer satisfaction and enhance a bank’s compliance with its Code obligations.

In addition, whilst the Terms and Conditions of all 10 banks surveyed were compliant with the obligations in Code clause 10.5, the significant majority (79%) of mystery call responses provided information that was inconsistent with the banks’ own Terms and Conditions. The CCMC recommends that banks pay particular attention to the discrepancies in information provided to consumers about the time frames for disputing a transaction and warn consumers that their rights may be lost if not disputed within time.

A copy of this Report can be found here.