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Case Study: Regulator Overturns Bank Decision and Orders a Full Chargeback
This case involved the following MyChargeBack services: chargeback preparation, filing an internal complaint with the bank and a financial regulatory complaint.
V.B. is a Honduran citizen seeking to earn additional income through an online investment brokerage. What V.B. did not recognise was the fact that the website he used was unregulated and failing to adhere to accepted rules. Within a few weeks he had deposited close to $8,000 via personal credit cards. Eventually, V.B. realised that his deposits were not being invested, nor were his withdrawal requests being honoured. At that point he contacted MyChargeBack for help.
Because V.B. never received any investment services and paid for the investments using a credit card, he was eligible for a full refund via a chargeback from his issuing bank. With that in mind, we began to prepare an ironclad case for V.B. to submit to his bank. It involved producing paperwork detailing the relevant card network rules, the relevant facts regarding the merchant’s business model and behaviour, and how they relate to each other.
V.B. presented the paperwork to his bank alongside his request for a chargeback. The bank’s response was rapid but unsatisfactory. Our client’s request was being rejected on the basis that failed investments are not eligible for a chargeback! They had completely ignored the paperwork!
Fortunately for our client, our professionals have handled a countless number of similar cases in the past and have developed a tool kit for resolving them. We assured V.B. that the fight was far from over, and there was no reason for him to lose hope.
The next step was to file a formal complaint with the bank. Such appeals occasionally bear fruit, but even when they do not, they are a prerequisite for escalation. In this case, the bank responded to the complaint by upholding its initial rejection of our client’s request.
The bank’s behaviour, while almost certainly not malicious, was in violation of its duties toward its customer. This was likely due to having a dispute department inadequately trained in complex card-not-present disputes regarding services (rather than goods). It is a scenario we commonly encounter; our expertise in addressing it is among the primary reasons why our clients choose us.
Although V.B. resides in Honduras, he was doing business with a bank located in Mexico. The next step was to escalate the complaint to the federal Mexican financial regulator, the Comisión Nacional Bancaria y de Valores (CNBV). We prepared a complaint for our client in accordance with relevant laws, regulations and best practices and instructed V.B. to submit it to the regulator.
Fortunately, the regulator saw the merit of our argument and, within approximately a week of receiving the complaint, our client received a full refund of all the deposits he had made to his ostensible broker.
At a Glance: MyChargeBack in Honduras
Complaint filed with a government agency
Payment made by the bank
MyChargeBack is a trading name of Quandrance Finance Ltd, registered in England and Wales.
Company registration 11522989. VAT number: 313 1819 32
Registered address: Chenies House, 21 Bedford Square, London WC1B 3HH
Correspondence address: Unit 1, Office 4A, 1st Floor, Ravensdale Industrial Estate, Timberwharf Road, London N16 6AY
Telephone: +44 20 3885 9306; +44 75 3715 0685 (Arabic support)
Quandrance Finance Ltd is authorised and regulated by the Financial Conduct Authority as a claims management company. Firm Reference Number: 838260
Regulated by the Information Commissioner’s Office in Respect of the Data Protection Act 2018, Number: ZA453504
You do not need to use a claims management company to make your complaint to the financial firm. If your complaint is not successful and you reside in Great Britain, you can refer it to the Financial Ombudsman (FOS) and the Financial Services Compensation Scheme (FSCS) for free if you wish for them to review your case, providing you have approached the financial firm first and the subject matter of your complaint against the financial firm falls within the remit of the FOS.