What are disputes/chargebacks and how to respond to them?

A dispute (also known as a chargeback) occurs when a cardholder/account owner contacts their bank and questions a payment to a merchant. A dispute is simply a request for more information about the charge, which may lead to a chargeback. 

Examples of dispute reasons:

1. Unauthorized transaction
2. Service not received
3. Service not rendered
4. Merchandise not received
5. Merchandise not provided
6. Duplicate billing
7. Duplicate transaction

When a dispute is raised, the bank notifies Curlec, and Curlec will then inform the merchant and provide them with an explanation of the dispute. The merchant is required to provide supporting documents by a given deadline (stated in the email) to overturn the dispute. The only way to overturn a dispute is by submitting evidence in a response. Even if a customer claims to have withdrawn the dispute, the merchant must respond with evidence of the withdrawal for the dispute OR the customer has to submit a dispute cancellation form for the dispute to be closed in the merchant's favour. 

Please note that there may be times when a customer has submitted a dispute cancellation form but the issuing bank may still decide to investigate the dispute. In this case, the chargeback process may not be cancelled and the merchant is responsible for contacting the cardholder should there be a pre-arbitration case. 

If the merchant does not respond by the given deadline, the bank assumes that the merchant has accepted the dispute. Throughout the dispute resolution process, Curlec facilitates the merchant's case but does not have influence over the outcome, which is at the sole discretion of the account owner's bank.

 Examples of supporting documents that a merchant could provide to challenge a dispute:

• Proof of previous successful payment(s) made by customer (e.g. if the merchant is a BNPL provider, then they can share evidence of earlier successful payments made by the account holder)
• Proof of delivery, ideally signed by the customer (particularly if the dispute reason is "Merchandise not received" or "Merchandise not provided")
• Copies of all customer service communications
• The terms and conditions the customer agreed to at the time of purchase
• Merchant's rebuttal letter (e.g. an explanation for why the customer is not entitled to a refund)

Do note that supporting documents will need to be relevant to the dispute reason.

In the case a chargeback occurs, Curlec will recover the chargeback amount plus a RM10 processing fee from the merchant via the Direct Debit which Curlec has on file with the merchant.