Question 1

Can a chargeback be sent to collections?

Accepted Answer

If a merchant successfully proves that a chargeback was illegitimate (fraudulent friendly fraud), they may attempt to send the unpaid balance to collections, though this is relatively rare. The situation becomes more complex when merchants claim breach of contract or terms of service violations related to the disputed transaction.

Question 2

What evidence is needed for a chargeback?

Accepted Answer

The evidence required depends on the chargeback reason code, but commonly includes transaction records, order confirmations, delivery tracking information, customer communication records, and proof of authorization. For fraud claims, for example, merchants need to show evidence that the cardholder authorized the transaction (such as AVS/CVV verification, IP address data, or signed delivery receipts), while for service disputes, they must provide evidence that goods were delivered or services were rendered as promised.

Question 3

Can you dispute a debt that was sold to a debt collector?

Accepted Answer

Yes, you have the legal right to dispute any debt with a collection agency, regardless of whether they're the original creditor or a third-party buyer of the debt. Under the Fair Debt Collection Practices Act (FDCPA), you must send a written dispute within 30 days of the collector's initial contact, and they must cease collection efforts until they provide verification that the debt is valid and accurate.

Question 4

What is the 777 rule for debt collectors?

Accepted Answer

The &acirc;777 rule&acirc; is an industry guideline (not an official FDCPA regulation) stating that debt collectors should not contact a consumer more than seven times within seven days about a specific debt, and after speaking with the consumer by phone, must wait seven days before calling again. While this isn't legally codified, many collection agencies follow it as a best practice to avoid harassment claims under the FDCPA.

Question 5

Is it worth disputing a collection?

Accepted Answer

Disputing a collection is almost always worthwhile if you believe the debt is inaccurate, doesn't belong to you, has already been paid, or exceeds the statute of limitations. Successfully disputing a collection can result in its removal from your credit report, potentially improving your credit score significantly, and you may eliminate the obligation to pay an invalid debt.

Question 6

Can I get sued for doing a chargeback?

Accepted Answer

Yes, merchants can technically file a civil lawsuit against you if they believe you filed a fraudulent chargeback. If you intentionally committed chargeback fraud, you could face legal consequences including lawsuits for the amount owed plus damages. However, legitimate chargebacks filed in good faith for valid reasons (actual fraud, non-delivery, defective products) carry virtually no legal risk, as you're exercising your consumer rights under card network rules.

Author

Susan Miller

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