Disputes and chargebacks

(Customer of Lloyds Banking Group, plc) #41

I just cannot get my head around why you’d expect any of what you have said from any card… just confused.

(Chris) #42

? My current credit cards already provide what I need, and they do the job well. If a company tries to scam me the card company step in, refund me then investigate with the evidence I provided until it is resolved.

Criminal solicitors…c’mon, calm the drama.

Some replies - it’s like step back for a second and realise it it’s never a good idea to route all spending through Monzo or any debit card based account.

Hell, I layer it 3 times, pay via PayPal and pay paypal via credit card.

(Jolin) #43

There’s an important point @chris.monzo is making, which seems to have been obscured by the back-and-forth over the technicalities of the different protections on offer. The process for a dispute with a credit card is currently:

  1. Dispute transaction
  2. Amount immediately credited to your account
  3. Transaction investigated (takes up to 45 days)
  4. Decision made and either the amount is re-charged to you or not

However, with :monzo:, the process is:

  1. Dispute transaction
  2. Transaction investigated (takes up to 45 days)
  3. Decision made and either the amount is refunded to you or not

This is a huge difference – it could be potentially crippling to someone, wiping out their ability to pay rent, buy food, etc. A fraudulent or even erroneous transaction is not necessarily only a couple of pounds. It could be in the hundreds.

I realise tha Monzo are doing a lot to provide excellent fraud detection, but that’s not going to mean much to someone who has their account emptied and now doesn’t know how they are going to buy food. And I also accept that there’s a good chance that the excellent customer service at Monzo would try and do something to help in such an extreme situation. But that sort of informal arrangement is not going to provide the confidence many people would need to stop using credit cards.

I think this is one of the issues :monzo: need to address if they want to provide the benefits of a credit card without offering the traditional credit card product (as @tom has indicated they would like). The re-crediting of a disputed amount during the investigation can be a big deal, and it provides the reassurance I need to use my card in various situations where I’m concerned about the potential for fraud. It’s a buffer that means I won’t wake up one day with no money (as well as the fact that the money on a credit card doesn’t leave my funds immediately).

(Jim) #44

Take a step back and realise that if you deal honourably with honourable suppliers, they will honour their promises to you. Caveat emptor.

(Jolin) #45

How fortunate that you’ve never had to deal with someone who turned out to be dishonourable. However, as a strategy for helping :monzo: reach a billion users, I’m not sure it will work. :grin:

(Jolin) #46

Coincidentally, I just read this thread about offline contactless fraud with frizzed lost or stolen cards, which is another potential avenue for the kinds of problems discussed :arrow_up::

At the bottom of the thread, @daniel says they will eventually come up with a solution, but until then it’s another potential problem. Maybe the eventual solution to the offline contactless issue could be combined with something to address the lack of funds during a disputes procedure?

(Alex Sherwood) #47

I wouldn’t have thought that there’s be much to dispute if there’s any fraudulent transactions after a card’s been frozen so even now, I’d be very surprised if users remained out of pocket for a significant amount of time after one of these (rare) transactions is made.

(Francesco) #48

What @jzw95 is partially correct, so I’d like to clear the air.

The standard process of a dispute with Monzo is:

  1. Customer contacts us to dispute a transaction.
  2. We investigate and determine if there are the grounds for a chargeback.
  3. We request for more information (receipts, proof of communication with the merchant, etc).
  4. We initiate the chargeback via Wirecard (our prepaid card issuer).
  5. There is a 45 day period during which the other party (the merchant) can appeal.
  6. The chargeback is successful or not successful (money gets credited back to the Monzo card or not).

Sometimes between 1 and 2, 2 and 3, and/or 3 and 4, customers understand that after all their dispute can be solved directly with the merchants (for example: claiming back the fee for a cancelled Uber journey, or getting a refund for a broken item delivered by Amazon - these are easily solved without the need of a chargeback).

Now - this is very important and I think it hasn’t been mentioned clearly enough: in case of fraudulent transactions, we immediately reverse the payments and cover the losses, and replace the card. Then we report those via Mastercard SAFE.
So if it is established that your card was stolen or cloned and used fraudulently, we offer total and immediate protection of your losses.

Case scenarios:

  • If the pizza you ordered got delivered 1 hour late and was cold and you want to raise a dispute via Monzo, we may suggest you to phone the pizza shop and ask for a refund before starting a chargeback.
  • If you bought some shoes online and they never got delivered to you and the seller is unresponsive, we will fight for you and get that money back. It may take up to 8 weeks, though.
  • If your card was stolen and used contactless to pay for fuel and groceries before you could freeze it, we will refund you straight away and send you a replacement.

In your particular case, @chris.monzo (I believe you were chatting with me yesterday via the support chat) - I am not sure what kind of dispute you were/are referring to, as my understanding was that the payment you wanted to dispute hadn’t taken place just yet. But feel free to reply to that conversation via the in-app chat if you have any updates on the issue, and we can take another look at it.

Protection from Fraud when Using PayPal Friends & Family
(Chris) #49

Thanks to @jzw95 you’ve clearly broke down the point I was making.

@francesco I don’t think there’s much else to say. Unless Monzo alters their process this isn’t suitable for a lot of my spending.


So what you are saying is that any bank’s current account isn’t suitable for you as you would rather buy everything with a credit card!

(Chris) #51

Sure why not let’s go with you.

(Andre Borie) #52

While I respect your decision I really don’t see what you’re afraid of by using Monzo (or any other debit card) especially for real-world transactions. I understand your concerns about online payments but you could still use Monzo for in-person transactions and use another card for online?

(Jolin) #53

Thanks for the detailed explanation, francesco, it’s good to know that in cases of fraud the amount is immediately re-credited to our accounts whilst the investigation takes place.

I’d just like to note, though, that this doesn’t completely address the ‘buffer’ use-case of a credit card. For instance, in this thread from yesterday, helenapoole was double-charged by Greater Anglia.

In that instance, she’s only out £15. But you can imagine that if the transaction had been for £100, this could cause someone significant problems if they have to wait for a week to get back the funds that should never have been debited.

I’m not saying this is right or wrong, but pointing out that this is the kind of safety net people use credit cards for. The context is that Tom has previously implied that Monzo would look at addressing the needs of people who use a credit card, without forcing us to use a ‘normal’ credit card product.

All I’m pointing out is that protection from mistakes or unscrupulous merchants is one of the problems people currently ‘solve’ with a credit card, and it revolves around the fact that I am not out of pocket whilst these issues are resolved.

(Patrick) #54

I had a similar thing happen to me and agree that we should be able to reverse pending transactions as per my reply on that post. These two cases (at the very least my one) are a by-product of monzo treating authorisation requests as actual transactions (for live balance reasons) and are not technically the merchant disputes falling under section 75 protection as described earlier on this post. We are conflating a number of completely different scenarios in this post.

(Jolin) #55

Note, though, that with a ‘traditional’ bank, while these cases would not show transactions in your feed, and would not affect your Balance, your Available Balance will decrease, and you would still lack the funds.

(James Smith) #56

It’s amazing how much incorrect information there is on this thread.

I’ll correct just the one thing though, chargebacks can be done on both Visa and MC credit and debit products. However, credit cards give the added protection of S75.

(James Smith) #57

Section 75 does not apply if paying through PayPal

(Chris) #58

I think we’re all aware of both points you made. (I’m not sure you’ve read everything in detail…)

PayPal is not being used for S75 - it’s being used to add an extra layer of protection. This way a dispute is made with the seller, PayPal and finally the credit card.

When a company tries to scam me I have 3 layers in which to resolve it. Also this way, my PayPal balance is negative opposed to my card or bank, until a time until it’s resolved. If PayPal wish to spend 45 days or whatever taking their own sweet time to investigate the dispute; they can, as it doesn’t impact me the same way. If they want to put me on hold for 20 minutes and then tell me a manager will call me back in 7 days: they can - I don’t care - it’s PayPal’s balance that’s negative.

I think in terms of Monzo, if the company decided - we’ll create a buffer pot and put the buyer first in terms of disputes - I would happy with this. Away from S75 or anything else just a policy that Monze decided to adopt that made sense and that (when reading the detail) didn’t incentivise Monzo finding in favour of the seller.

If they decided to:

  1. Refund first
  2. Then investigate
  3. Outcome - either credited or debited.

I would be happy with this and happily use Monzo for pretty much everything.


Why would Monzo do that, or why would you expect them to, for a DEBIT card? No other UK bank does this as standard policy (excluding any discretion an account or branch manager may have). The reason why they can afford to do so on a CREDIT card is by charging the customer interest (or in the case of Amex an annual fee AND interest).

(James Smith) #60

How are you funding your PayPal transaction - you must either be paying at the point of transaction through your linked card/bank account or through their PayPal credit facility?

Please do take care, if PayPal refuse your dispute, your credit card is very very unlikely to be able to fight a chargeback/section 75 as PayPal, who you have contracted with, have met their obligations. Therefore I fail to see how you have your three lines of defence.