Tips for Filing Credit Card Chargeback Disputes

Tips for Filing Credit Card Chargeback Disputes


Whether Spirit Airlines files for bankruptcy or not, it's good to keep these tips for filing credit card chargeback disputes in mind for any vendor that goes bankrupt before it delivers a product or service you paid for. The pandemic caused several bankruptcies, but industry consolidation can occasion more. And note that even many premium credit cards no longer cover bankruptcy under their travel insurance benefit (see Chase Cards: Trip Cancellation Won't Cover Airline, Tour Company Bankruptcy).

1. Research the Travel Provider's Policies and Legal Obligations

Before seeking a refund, check the company's refund policy and also any legal obligations it may be under, so that you can pursue a remedy that you're confident you're entitled to. For example, U.S. airlines that cancel flights are required by the Department of Transportation to provide a refund, not just a travel credit. And EC 261/2004 requires European airlines to offer passengers a refund for cancelled flights. Even though airlines may only want to offer vouchers for future travel, they are bound by EC 261/2004 to offer a refund.


2. Try to Resolve It With the Travel Provider First

Always try to obtain a refund from the travel provider first, since credit card disputes will generally require this anyway, and it's usually a more protracted process. It can be painful trying to get through on a phone line, so also try to use email, chat, or even Twitter to get through to the travel company. If using chat and a transcript isn't provider, be sure to take screen shots, and if speaking by phone, take notes and make sure to select the option to have your call recorded; it's helpful to have documentation of your efforts to obtain a refund.


3. Check if Your Purchase is Protected by the U.S. Fair Credit Billing Act

If your credit card purchase was made within 60 days of a cancelled flight or other service that won't be delivered as promised, you can file a billing error dispute under 15 U.S.C. §§1666(a)-1666(b), which states: “After complying with the provisions of this subsection with respect to an alleged billing error, a creditor has no further responsibility under this section if the obligor continues to make substantially the same allegation with respect to such error” where a billing error can consist of “A reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction.”

Note that there are several things that must be true to exercise one's rights using the U.S. Fair Credit Billing Act:

  • You must be a U.S. consumer and have used a credit card to make the purchase
  • The airline must have cancelled the flight or the merchant didn't provide the agreed upon good or service
  • You must have sent your credit card issuer's billing inquiries department a written letter that reaches the issuer within 60 days from the statement date that showed the charge, making a good faith attempt at a refund
  • You cannot have accepted a travel credit, itinerary change, or other change to the original agreement as that would constitute a new service agreement

Your credit card issuer must then acknowledge your complaint within 30 days, unless the dispute has been resolved


4. Be Persistent; Poor Responsiveness May Indicate Cash Flow Issues

If you've contacted, say, a hotel, several times and still not heard back after a week, I'd be concerned and would file a chargeback on a deposit that hasn't been returned, if you're outside the cancellation period and it's supposed to be fully refundable.


5. File Non-FCBA Disputes Online

While Fair Credit Billing Disputes must be mailed to the credit card issuer's billing inquiries address, if your dispute doesn't qualify, say because it's for a purchase too long ago, file online. Most credit card online accounts enable you to click into a specific transaction and dispute it. Otherwise, given the sheer volume of calls right now, you could be waiting a very long time for customer assistance when calling the number on the back of your card.

Even if you file online, however, also be sure to open all snail mail as you're likely to receive a response from your credit card issuer by mail on whether you've prevailed or not in your chargeback dispute, and this notice may not be sent to you by email.


6. For the Future: Consider Travel Insurance

Not a chargeback tip, but for additional protection, consider an annual travel insurance plan. We typically recommend Allianz for travelers, which does provide bankruptcy protection for many airlines, cruise lines, and tour operators as part of its travel insurance policies. Note that you must purchase the policy within 14 days of your initial trip deposit, the travel entity must cease operations at least 7 days after your policy's effective date, the policy must not have been purchased directly through the entity that goes bankrupt (or its affiliate), and the entity must be listed on Allianz Travel's Covered Supplier List (note that Spirit Airlines is not on the covered supplier list). At time of writing, these are the covered airlines: Aer Lingus, Air Canada, Air New Zealand Ltd., Alaska Airlines, American Airlines, Allegiant Air, British Airways, Delta Airlines, Easy Jet, El AL Israel Airlines, Emirates, Hawaiian Airlines, Iberia, Japan Airlines, JetBlue, Lufthansa, Nippon Airways, Ryanair, Singapore Airlines, Southwest, United Airlines

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    4 years ago

    If I purchased tickets for my sister’s family on my CC last November, can I dispute it with my CC company if AA refuses to refund?
    I didn’t exactly understand that part of your article.