A chargeback is the industry-standard process by which payment settlement disputes are resolved between card issuers and merchants under card scheme rules, according to the Financial Ombudsman Service. It allows you to challenge a transaction and reclaim money spent using your debit card or credit card. If you buy a product that never arrives, or if you fall victim to fraud, this mechanism acts as a critical consumer safety net.
What is a chargeback?
When a purchase goes wrong, a chargeback allows your bank to request the transaction amount back from the retailer's bank. It is not a statutory right but a voluntary mechanism run by card schemes like Visa, Mastercard, and American Express, as highlighted by the Financial Conduct Authority.
According to the UK Finance Annual Fraud Report (2025), remote purchase fraud losses reached nearly £400 million in 2024. In these cases, bank chargebacks give you a reliable route to recover your funds.
However, confusion persists. Data from Chargeflow indicates that about 72% of cardholders mistakenly believe that a chargeback and a refund are the same. In reality, a refund is issued voluntarily by the retailer, while a chargeback is a formal dispute forced through the banking network.
Are chargebacks illegal?
Chargebacks are fully legal mechanisms under card network rules. However, filing false claims for purchases you made is known as friendly fraud and is a form of refund abuse.
When you win a claim, the merchant loses the funds and pays a fee. Expert Market notes that UK dispute fees typically average £15 to £25. If the merchant wins through representment, they recover the funds but may still face administrative costs.
How does the chargeback process work?
The process begins when you cannot resolve a transaction issue directly with the seller. Always try contacting them first, as banks usually require proof of contact before accepting your claim.
Here is how the card network chargeback scheme functions:
- You dispute the transaction: You contact your provider with evidence of the failed purchase.
- Your bank reviews the request: If approved, they credit your account and request the funds from the merchant’s bank.
- The merchant can dispute the claim: If they believe the transaction was legitimate, they can submit evidence (known as representment) to fight the claim.
According to UK Finance, a successful dispute only reverses the digital payment. It does not legally cancel a sales contract, meaning the merchant can still legally take action to recover the balance.
Debit card vs. credit card chargebacks
While you can use chargebacks on both debit and credit cards, the underlying protections differ.
Chargebacks on debit cards
If you make a purchase using a debit card, a debit card chargeback is your primary line of defence. Since debit cards link directly to your bank account, getting your money back quickly is crucial.
This is processed under Visa or Mastercard rules. Unlike card payments, direct bank-to-bank transfers do not offer this safety net, leaving you with no recourse if a transaction goes wrong.
Chargebacks on credit cards
When you use a credit card, you can still request a credit card chargeback through your issuer. This is highly useful for purchases under £100, which are not covered by other legal protections. For larger purchases, you also have access to powerful statutory protections that go beyond voluntary card rules.
Chargeback vs. Section 75: what is the difference?
If you use a credit card in the UK, you have two distinct protection paths: a voluntary chargeback or a statutory Section 75 claim. Understanding chargeback vs section 75 is essential when a purchase goes wrong.
Unlike Section 75, which only applies to purchases between £100 and £30,000, card chargebacks have no minimum or maximum transaction value limits. This means you can raise a chargeback for a £5 purchase or a £50,000 purchase.
Section 75 of the Consumer Credit Act 1974 is a legally binding UK consumer law. It holds your credit card company jointly liable with the retailer for breach of contract or misrepresentation on individual purchases valued between £100 and £30,000, as noted by MoneyHelper.
To see how these rules compare in practice, look at this table:
| Feature | Chargeback scheme | Section 75 protection |
| :--- | :--- | :--- |
| Card types | Debit and credit cards | Credit cards only |
| Purchase value limits | No minimum or maximum limits | Between £100 and £30,000 |
| Legal basis | Card network rules (Visa, Mastercard, Amex) | UK law (Consumer Credit Act 1974) |
| Joint liability | No (bank acts as a mediator) | Yes (bank is jointly liable) |
| Standard time limit | Typically 120 days | Six years (statute of limitations) |
The difference is clearest if a merchant goes bankrupt. If you pay a £50 deposit on a credit card for a £500 sofa and the business fails, you are protected under Section 75 for the entire £500. Under a debit card chargeback, your bank can only pursue the exact £50 charged, with no payout guarantee if the merchant has no funds left, according to MoneyHelper.
What are the time limits for a chargeback claim?
You must act quickly to initiate a chargeback claim. For most Visa and Mastercard transactions, the standard time limit is 120 days. This starts from the payment date or the day you expected to receive the goods.
For example, if you booked a flight months in advance and the airline went bust on the day of travel, your 120 days starts from the flight date, not the booking date. There is also an absolute cut-off limit of 540 days from the original transaction date, after which card networks will not process a dispute.
How to initiate a chargeback with your bank
To make a claim, you must contact your card provider directly. Major UK banks offer straightforward digital routes to start a dispute:
- Barclays: Start a chargeback barclays claim in your banking app under Help with this transaction.
- HSBC: Complete a digital dispute form online or call customer services for an hsbc chargeback claim.
- Santander: Raise a chargeback santander claim online through their dispute portal or by calling customer support.
- Tesco Bank: Submit a card dispute form through their secure portal or call their dedicated claims team to request a tesco bank chargeback.
- Other providers: For a chargeback natwest, chargeback lloyds, or chargeback halifax claim, use their mobile banking app or online account.
When preparing how to do a chargeback, gather all evidence, including receipts, communications with the seller, and proof of any faults.
What happens if a chargeback is disputed?
Merchants can challenge your claim by submitting clear evidence to their bank. If they provide robust proof that you received the goods, your bank may reverse any temporary credit and deduct the funds from your account again. This is why gathering clear, honest evidence before starting the process is vital.
What to do if your claim is rejected
If your bank rejects your chargeback claim, you can file a formal complaint directly with them. If they fail to resolve it within 8 weeks, you can escalate your case to the Financial Ombudsman Service, which offers a free, independent service to settle consumer disputes.