Chargebacks are a necessary part of the legal process, not just an optional customer service activity. While there is considerable flexibility in how banks and card networks manage them, the underlying procedure has been governed by laws since the 1970s. It’s crucial to comprehend why the process works and how chargeback laws are applied to debit card transactions and foreign payments. Businesses typically don’t need to reference federal law to fight and prevent chargebacks successfully.
For instance, the 1968 Truth in Lending Act (TILA), which set several essential requirements for credit card issuers, marked the beginning of federal regulation of credit card transactions. One of them required issuers to disclose precise details about the cost of the credit they were issuing in a format that was standardized and easy to understand. Chargebacks were made possible by the Fair Credit Billing Act (FCBA) of 1978 so that customers would not be forced to pay for billing errors, damaged or missing items, illegal transactions, and fraudulent charges. The FCBA gave consumers the option to contest such fees.
