Bank of America DisputeCrucial BoA Chargeback Information for Both Consumers & Merchants

March 2, 2023 | 13 min read

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Bank of America disputes

In a Nutshell

What can consumers — and merchants — expect from a Bank of America dispute? For instance, how long do consumers have to wait to get their money back? How can merchants prevent BoA disputes from escalating to chargebacks? This article will walk both parties through the process from start to finish.

What are the Rules for a Bank of America Dispute? We’ve Got the Answers.

As one of the largest financial institutions in the United States, Bank of America provides services to approximately 67 million consumer and small business clients around the country. They’re a generally trusted household name in banking and finance.

But, what if there’s a problem with a transaction involving a BoA card?

How does Bank of America handle disputes between consumers and merchants? What can each party expect from the process? Let’s go over it together.

What is a Bank of America Dispute?

A dispute happens when a bank customer challenges a recent charge on their statement. The buyer might claim the transaction was unauthorized, or that there was some other issue with the purchase.

The bank will investigate the matter to determine if the customer’s concerns are valid, and whether or not the merchant is at fault. If so, the bank will approve a chargeback against the merchant.

Learn more about chargebacks

You could consider a Bank of America dispute the preliminary stage before a chargeback is filed against a merchant. After investigating the matter, BoA will decide whether the customer’s claim is valid, and either reject the claim, or initiate a Bank of America chargeback.

At this stage, the customer will be issued a provisional refund for the original transaction amount. The merchant will have the funds removed from their business account, and will be assessed additional chargeback fees by their own bank.

Valid Reasons to Dispute a BoA Charge

When a Bank of America customer decides to dispute a charge, they’re essentially saying one of two things:

The transaction was fraudulent and was not authorized by the cardholder.

The merchant failed to uphold their end of the transaction and deliver what was promised.

If you’re a cardholder, and are looking to initiate a BoA dispute, you want to start by ensuring that you have a valid reason to dispute a credit card charge. So, let’s break down the two categories outlined above:

Criminal Fraud Claims

Criminal fraud disputes occur when a cardholder doesn't recognize a transaction or didn’t approve the transaction in question. In other words, the charge is the result of an unauthorized third-party using stolen information to complete a transaction. Common scenarios may include:

  • Account Takeover: a third-party “hacks” a victim’s account and conducts transactions using the stolen account.
  • Identity Theft: a criminal uses stolen information to open and use lines of credit in the victim’s name.
  • Triangulation Fraud: Scammer impersonates a merchant and ships items to buyers, but pays for goods with stolen information.

Those are just a few common criminal fraud tactics. You can find more outlined in our main article about eCommerce fraud:

Learn more about eCommerce fraud

Merchant Error Claims

Merchant error disputes happen when merchants fail to live up to their obligation as part of a transaction. The cardholder is charged for goods or services, but it’s done outside of agreed upon times and methods.

Some situations in which a chargeback could be warranted include:

  • A card being charged for the wrong amount.
  • The merchant didn’t credit a customer’s account after a return.
  • Damaged or faulty goods were shipped, and the merchant won’t replace them.
  • Goods or services that were paid for, but which were never provided.

Again, these are just a few examples. There are literally dozens of potential errors that could lead to disputes, which you can learn more about below:

Learn more about merchant error

Cardholders are expected to have tried to contact the merchant about the issue before their bank or credit card network will approve a dispute on their behalf. Bank of America may approve a dispute without a cardholder having contacted the merchant first, but only in circumstances of clear and deliberate fraud. Otherwise, evidence of attempted contact may be required to proceed.

Invalid Reasons for a BoA Dispute

Of course, not all Bank of America dispute requests are valid.

The law allows consumers to dispute charges when the merchant has made a legitimate error or has failed to uphold their end of a transaction. However, items that a buyer decides they don’t like, or which they no longer need, are not eligible for those protections.

If a cardholder requests a chargeback, but has no valid reason to do so, they're technically engaging in first-party fraud. This could carry consequences for the cardholder, depending on the circumstances.

Examples of invalid chargeback reasons include:

  • Not recognizing the merchant’s billing descriptor.
  • Forgetting about a recurring payment.
  • Being impatient for a refund.
  • Not understanding the difference between disputes and refunds.
  • Forgetting about a purchase.
  • Not wanting to go through customer service for a valid return.
  • Waiting too long to return the item within the merchant’s return policy.
  • Someone in your household made a purchase on your account.
  • Filing a dispute because it seems easier or more convenient than a refund.

Customers should take note that Bank of America has begun to crack down on acts of repeated merchant abuse, like in the above situations. They’re starting to impose heavier consequences for this behavior, such as:

  • Loss of any refunds or disputed funds.
  • Fees and penalties if disputes are “won” by merchants after investigation.
  • Loss of standing with banks or card networks.
  • Accounts might be forcibly closed.
  • Damage to one’s credit score.
  • Those who engage in long-term, deliberate abuse can even be prosecuted.

How to Dispute a Bank of America Charge

Remember: cardholders are expected to have tried contacting the merchant before disputing the charge. Evidence of an attempt at contact may be required, unless the case is a clear, present example of criminal fraud.

Chargeback time limits vary depending on the reason for the dispute. In most cases, though, cardholders have 120 days after the original purchase date to dispute the charge. Bank of America issues both Mastercard- and Visa-branded cards, so the exact requirements may vary depending on the Mastercard reason code or Visa reason code.

Merchants: Instead of spending time memorizing different rulesets, get the support you need to manage all chargebacks, regardless of the issuer.REQUEST A DEMO

If a cardholder suspects their information was stolen, they should report the issue through Bank of America’s customer privacy and security portal immediately. For all other disputes, cardholders can file directly on the Bank of America website or through the app by following these steps:

From the Bank of America Mobile App:

  • Log in to the app using your account information.
  • Select the account with the transaction you'd like to dispute.
  • View your recent transactions and tap the specific transaction to select it.
  • Tap “Dispute Transaction” and follow the instructions on screen.

From a Desktop Computer:

  • Log in to Online Banking.
  • Select the account with the transaction you'd like to dispute.
  • View your recent transactions and click the specific transaction to select it.
  • Click the “Dispute this transaction” link and follow the instructions on screen.

Once your claim has been submitted, you can check the status of your claim in the mobile app or on your computer. Bank of America claims will be viewable on the bank’s site and app for up to 120 days from the date the claim file is moved from active to closed status.

What Happens After a Bank of America Dispute is Filed?

There are a couple of things that could happen after a dispute is filed with Bank of America.

For a debit card, the bank may issue a provisional credit. This is a temporary credit to the account, and will be removed once the funds from the original transaction are returned to the account in question.

For a credit card, the bank may adjust the customer’s outstanding balance. They’ll also recalculate minimum payments based on the total balance of the account balance, minus any transaction in dispute. If the dispute is filed in error, BoA will typically correct the account within 1-3 business days. 

If the customer is set up for AutoPay, or has a scheduled payment in 3 or more days, the bank will review whether the scheduled amount needs to be adjusted in light of the new balance. If so, the bank will reduce the scheduled payment amount to prevent the account holder from paying the disputed amount.

Customers can find more information about their dispute progress via the BoA Online Banking Message Center. If the bank requires additional information to process the dispute, cardholders can respond to message requests directly through the above link. Please note that message requests must be answered within 12 business days. 

Tips to Optimize Consumer Claims

Once the merchant has been informed of the incoming chargeback, they have the right to respond to the dispute with their own evidence to prove the original transaction was legitimate. This is called representment (more on this below).

If the merchant can convince the bank that the cardholder’s dispute was in error, those funds will be once more removed from the customer’s account and returned to the merchant. This is why it’s so important for customers with legitimate dispute concerns to take the time to learn about the process before they file.

Here are a few tips for consumers to get their dispute right the first time:

Stick to the Facts

Make sure you provide the who, what, when, and why. Gather account numbers, merchant contact information, transaction details, and reasons for disputing the transaction. Present the evidence in a professional manner, and avoid anything that appears argumentative, utilizes emotive language, or strays from the topic.

Only Valid Reasons Apply

The customer should proceed with the dispute only if they can point directly to one of the above reasons to explain why the transaction is erroneous or malicious.

Provide Evidence

This is the cardholder’s opportunity to prove that the merchant failed to uphold their end of the transaction. Listing photos, delivery/item damage photos, conversation screenshots with the merchant, errors on credit or debit card statements, etc., may help substantiate the claim.

Watch the Time

Time limits for disputes vary based on reason code and the card brand in question. In many cases, buyers have 120 days after purchase to file a chargeback. But, it could be up to 540 days in some situations.

Now that consumers are better armed to file valid disputes with Bank of America, let’s take a look at the situation from the merchant's perspective. 

The Impact of Disputes on Merchants

Unfortunately, merchants tend to get the short end of the stick when it comes to disputes and chargebacks. For example, even if a merchant does manage to win their representment case and convince the bank that the customer was in error, any chargeback fees they were charged won’t be refunded. This means merchants get stuck with those fees whether they were in the wrong… or not

Bank of America chargeback fees range from $25 to $50 per disputed transaction. Also, once merchants receive notice of the disputed transaction, they have a very limited period of time to respond: just 30 days for Visa, and up to 45 days for Mastercard. 

None of this is great news. However, the dispute process isn’t all doom and gloom, either.

As mentioned above, merchants have the right to fight illegitimate chargebacks through the representment process. Also, before this stage, Bank of America offers several dispute resolution options on their website to resolve transaction disputes before they reach the chargeback stage. 

How Merchants Can Prevent BoA Disputes

Here are a few tips directly from Bank of America that can help merchants resolve disputes before they become chargebacks:

  • Obtain proper authorizations for all card transactions, including any necessary signatures, PINs, address verification, or CVV codes.
  • Ensure all transactions are approved (not declined) by the issuing bank.
  • Verify that the cardholder was advised of the purchase details and given the option to confirm or cancel at the time of the transaction.
  • Wait to process transactions until the merchandise is shipped or delivered.
  • Ensure all transactions are processed accurately with the proper transaction code and in a timely manner.
  • Make sure your registered business name on the payment system matches (or is at least identifiably similar to) the one on the cardholder’s statement.
  • Obtain the customer or other designated person’s signature for proof of delivery when merchandise is delivered.
  • For subscriptions, obtain customer acknowledgment and agreement to recurring transactions, and provide notice to the cardholder prior to each charge.

According to the 2022 Chargeback Field Report, up to 64% of all chargebacks are the result of friendly fraud. This occurs when a buyer disputes a charge without a valid reason to do so, often weeks or even months after a transaction has been approved. How can merchants fight back without further impacting their bottom line?

Merchants Can Fight Invalid Bank of America Chargebacks

Because friendly fraud is post-transactional, opportunities to prevent it are limited. That isn’t to say that merchants can’t or shouldn’t fight back against bad dispute claims, though. 

Merchants can fight back against illegitimate Bank of America chargebacks through the representment process mentioned above. During this process, merchants literally “re-present” the transaction to the bank to explain its legitimacy. To do so effectively, they must present the bank with compelling evidence to prove the cardholder disputed the transaction in error. If the merchant’s representment package is compelling enough to refute the consumer’s dispute, BoA may return the original fund to their merchant account. 

Learn more about representment

Combatting chargebacks is a costly and time-consuming process. If you’re feeling overwhelmed, don’t worry: we can help.

Chargebacks911® is an industry leader in chargeback prevention and dispute management. If your business is on the receiving end of chargebacks, call us today for your free ROI analysis.

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