Merchant overcharged you? How to handle credit card disputes in India effectively

In today’s rapidly evolving digital age credit card transactions have now become commonplace in India. Still, instances of extremely high and incorrect charges or unauthorised transactions are not at all uncommon.

That is why, clearly understanding the dispute resolution process is important for credit card users to safeguard and defend their financial interests.

This particular write-up is dedicated towards discussing simple ways through which credit card users can handle credit card disputes with merchants and can obtain a clear solution to their day to day problems.

What are some common dispute scenarios?

Now, disputes and issues can arise from various situations such as:

• Unauthorised and unaccounted charges: Transactions made without the consent of a credit card holder can result in the creation of a dispute.
• Errors and mistakes in billing: Duplicate transactions, incorrect amounts mentioned in the bill, minor errors overlooked by the billing entity can also result in problems.
• Product, usage or service issues: Non-delivery or substandard goods or services can also cause friction and disputes. For example, you invest in or purchase a product or service through your credit card and it fails in meeting your expectations. Then the reimbursement of the amount of such purchases can cause disputes.
• Frauds, credit card loss, misuse: Disputes can also arise if a credit card is lost and results in a financial crime due to no action being taken by the concerned authorities.

In all such cases prompt identification and crisp action are essential to quell such issues decisively. For example if a credit card is lost prompt action is needed to block the credit instrument to ensure that the owner of the card suffers no financial damage. It will also help in ensuring that your credit utilisation ratio remains intact. 

Basic steps to initiate a dispute

1. Reach out to the merchant: You should begin by reaching out to the merchant. This will help in having a clear communication with the concerned authorities and resolving the issue amicably.
2. Keep your bank informed: If the issue remains unresolved, then inform your credit card issuing financial institution as early as possible and in the worst possible cases within 180 days of the disputed transaction, after the same give the necessary details, including transaction details and any documented communication with the merchant. This will be seen as a good sign of sincere credit management. 
3. Submit supporting documents: Collect all the supporting documents and submit them to the bank. Documents such as invoices, correspondence, signed documents etc., to process the entire dispute resolution.
4. Discuss, get to know and apply for temporary credit: Some financial institutions offer provision credit during the investigation period. This will help you in meeting your day to day expenses and closing out any pending EMIs.
5. Outcome of the investigation: Once the entire investigation is completed, the bank will communicate the result. The decision of the bank will then either result in a refund or reinstatement of the charges.

Now, this complete process can easily take up to 45 days, depending on the complexities of the case. It also depends on an individual basis and most banks follow their own pre-defined procedures. For more, consider reaching out to your respective financial institution.

Leverage chargeback mechanism to request reversal

Now a chargeback is a credit card user protection tool that allows card holders to raise disputes against a transaction. This mechanism allows credit card holders to request a reversal. To initiate a chargeback you can follow the given points diligently:

• File a request: Reach out to your financial institution to file a charge back request. For the same, provide all the relevant documents.
• Role of the bank: The issuing bank then goes on to investigate and coordinate with the merchant’s bank.
• Response of the merchant: Now, the merchant can accept the chargeback or even provide clear evidence to contest it.
• Final decision on the dispute: Finally, based on the investigation, the bank decides to uphold or even reject the chargeback.

It is crucial to remember that frequent chargebacks can dent a merchant’s reputation and may lead to penalties as well. It is eventually about the efficient flow of business and all parties involved must adhere to the laid down rules and regulations.

How can you seek legal recourse?

If the issue remains unresolved the credit card users can escalate the matter through legal channels and get a clear resolution.

• File a complaint through consumer forums: File a complaint with the designated consumer forum for dispute redressal.
• E-Daakhil portal: Use the online platform to lodge a complaint digitally and carefully track the progress by following the steps given on the website.
• Obtain legal assistance: Reach out to a consumer protection professional i.e., a lawyer for guidance and representation. The legal professional can also help you in clearing your doubts with regards to the entire procedure and make things easier for you.

Hence, these avenues provide a structured method and mechanism to resolve and address the grievances efficiently.

How can you minimise the risk of disputes?

To ensure that things are kept under control and you are able to minimise the disputes effectively:

• Check and monitor statements regularly: Do note, regularly go through your credit card statements and ensure that there are no anomalies associated with your statements and transactions.
• Focus on using secure platforms: Use trusted platforms for transactions to avoid sharing your data and card details with unreliable platforms that can result in a misuse of your card details and harm your financial health, credit score and prosperity.
• Create stronger passwords: Periodically update your credit card profile with stronger passwords. Implementing a robust password protection mechanism will ensure that things are always under your control and updating them consistently will help you keep your credit card account safe.
• Enable time bound alerts: Do note, activate transaction alerts on a real time basis to stay informed about any and every ongoing development and transaction related to your credit card account. This will keep you informed about the changes and developments in your account. It will also minimise the chance of fraud as you will be in a position to raise disputes immediately as soon as any problem arises.

Therefore, by following these practices credit card users can boost their financial security and promptly deal with any discrepancies related to the same in an efficient manner.

Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.