Can you go to jail for false chargebacks?

Itâs technically possible to be charged with wire fraud for filing abusive chargebacks. Although chargeback fraud is illegal, itâs unlikely that youâll be held criminally responsible or face jail time for the crime. You may expose yourself to legal action, however, if the fraud is pervasive or if it involves significant dollar amounts.

Can you sue someone for a false chargeback?

Yes. As a merchant, you can file a civil lawsuit against a chargeback fraudster to recover damages. That said, youâre unlikely to win the lawsuit unless you can show that you can prove that the fraud was egregious. The traditional chargeback process, rather than the court system, may be your best bet for most instances of chargeback fraud.

Do merchants ever win chargeback disputes?

Yes. Merchants win disputes in about 20% to 30% of cases, suggesting that itâs an uphill battle. Recovering revenue is an even rarer feat; according to the 2024 <a href="https://chargebacks911.com/chargeback-field-report/"><em>Chargeback Field Report</em></a>, merchants recover revenue just 18% of the time.

What happens if you lie on a chargeback?

If you lie when filing a chargeback, the merchant you filed your dispute against may challenge your claim through representment. If your issuer subsequently rules in the merchantâs favor, you will be on the hook for the entire transaction. If you frequently file false chargebacks, your issuer <a href="https://chargebacks911.com/chargeback-abuse-goes-viral/">may revoke your credit or debit card privileges</a>.

What happens if you dispute a false charge?

If you dispute a false charge that occurred due to merchant error or misconduct, you are exercising your <a class="wpil_keyword_link" href="https://chargebacks911.com/chargeback-rights/" title="chargeback rights" data-wpil-keyword-link="linked" data-wpil-monitor-id="106">chargeback rights</a> as intended. Your issuer will investigate your claim, give the merchant an opportunity to respond, and decide on the outcome. On the other hand, if you falsely dispute a legitimate transaction, you are committing chargeback fraud and may expose yourself to penalties or sanctions from your issuer.

Author

Ben Scrancher

Ben Scrancher is the Senior Vice President of Business Development at Chargebacks911. Since joining Chargebacks911 in 2014, he has played an integral role in fostering the company's substantial strategic global expansion, elevating Chargebacks911 as the leading brand in dispute management and merchant revenue recovery.