When to Seek a Chargeback vs a Bank Dispute

Quick answer

If the transaction was charged to a credit card, start with a chargeback (or a billing error claim under the Fair Credit Billing Act). If the money left your checking account (ACH, debit card, or direct withdrawal), open a bank dispute with your financial institution under Regulation E. Both paths can overlap for hybrid situations, but payment type and timing usually determine the correct first step.

Why payment type matters

• Credit card purchases: Chargebacks and billing-error claims are processed under card-network rules (Visa, Mastercard, American Express) and federal protections like the Fair Credit Billing Act (FCBA). Card issuers can provisionally credit your account while they investigate and pursue the merchant on your behalf (see Visa/Mastercard operating rules and the CFPB’s guidance).
• Debit card/ACH/checks: Bank disputes are handled under Regulation E (for electronic transfers) or general bank error resolution procedures. For unauthorized electronic transfers, Regulation E sets reporting timelines that affect your liability and the bank’s investigation.

Legal protections and time limits (key points)

• Fair Credit Billing Act (FCBA): For billing errors on credit cards (unauthorized charges, charges for goods/services not received), you generally have 60 days from the date the issuer sends the first billing statement showing the error to send your written dispute. (See CFPB and FTC guidance.)
• Regulation E (Electronic Fund Transfers): For unauthorized electronic transfers, notify your bank promptly. Liability limits: report within 2 business days after learning of a lost/stolen card to limit liability to $50; after 2 days and before 60 days, liability can rise to $500; after 60 days, you may face unlimited liability (see CFPB regulation summaries).
• Card-network chargeback deadlines: Card networks set their own timeframes (often 60–120 days from transaction date or delivery date, depending on reason code). These are shorter than statutory windows in some cases—act quickly.

When to contact the merchant first

Always try the merchant first for refunds or corrections, especially for service problems, returns, or late deliveries. Many disputes are resolved faster that way with less documentation. If the merchant refuses or doesn’t respond within a reasonable time, escalate to your issuer or bank.

How to decide: practical checklist

1. Payment method: credit card → chargeback; debit/ACH/check → bank dispute.
2. Nature of problem:

• Fraud or unauthorized charge → either path can apply, but if it’s a debit/ACH, start with the bank (Reg E); if credit card, start with issuer (FCBA/chargeback).
• Merchant error (duplicate charge, wrong amount, not delivered) → chargeback for credit card; for debit, bank dispute or merchant-based resolution first.
• Subscription/recurring billing you can’t cancel → chargeback for credit card; for debits, use bank stop-payment and file a dispute.

1. Time elapsed: check your cardholder agreement and bank statements—deadlines vary.

Step-by-step: filing a chargeback (credit card)

1. Gather evidence: receipt, order confirmation, shipping/tracking, screenshots of merchant communications, and any cancellation notices.
2. Contact the merchant and request a refund (record dates/time and representative names).
3. If unresolved, call your credit-card issuer or use their online dispute form and explain the reason (fraud, non-delivery, defective product, duplicate billing).
4. Provide supporting documents to the issuer. Ask about provisional credit while they investigate.
5. Keep records of all communications and the issuer’s dispute ID.

Step-by-step: filing a bank dispute (debit/ACH/check)

1. Immediately flag the transaction on your bank’s online tools and follow the bank’s dispute or fraud-report workflow.
2. Call your bank’s fraud/dispute line and submit a written statement if requested. Provide the same supporting documents as you would for a chargeback.
3. For unauthorized electronic transfers, ask about provisional credit and the bank’s timeline under Regulation E.
4. If the bank declines or is slow, file a complaint with the Consumer Financial Protection Bureau (CFPB) or your state banking regulator.

Evidence checklist (what strengthens your case)

• Original receipts or order confirmations
• Shipping tracking and delivery proof
• Screenshots or copies of emails/chat with the merchant
• Bank or card statements showing the charge
• Cancellation confirmations and refund attempts
• Police report (if identity theft is involved)

Typical timelines and what to expect

• Initial response: Many issuers/banks acknowledge disputes within 5–10 business days.
• Investigation: A full chargeback investigation can take 30–90 days; complex cases may take longer. Banks under Regulation E generally investigate within 10 business days for electronic transfers and may provisionally credit your account during that period.
• Final decision: If the card issuer or bank rules for you, the merchant’s payment is reversed. If they rule against you, the provisional credit (if any) may be removed.

What happens if your claim is denied

• Ask for a written explanation of the denial and the specific reason codes used (card networks publish chargeback reason codes; banks should cite Reg E/other rules).
• Submit additional evidence if available.
• Escalate: file a complaint with the CFPB (consumerfinance.gov/complaint) or your state attorney general’s consumer protection division. For unresolved merchant disputes, consider small claims court if the amount justifies it.

Common mistakes I see in practice

• Waiting too long to act: Missing statutory or network deadlines often kills a claim.
• Failing to document merchant contacts: Banks and issuers rely heavily on written evidence.
• Confusing chargebacks with refunds: Chargebacks are dispute processes with financial institutions; refunds are merchant-initiated.

Real examples from my practice

• Non-delivery (credit card): A client paid $1,200 for custom furniture that never arrived. They contacted the merchant for 30 days with no response, then filed a chargeback. The issuer provisionally credited the client, investigated, and reversed the merchant’s settlement after finding no delivery proof.
• Unauthorized ACH: Another client found recurring $60 ACH withdrawals they didn’t authorize. They notified the bank immediately. Under Reg E rules, the bank investigated and returned the funds after confirming the transactions were unauthorized.

When both paths apply

Sometimes a transaction involves both systems (e.g., a merchant charged your debit card but routed it as a credit-card transaction, or a business uses an ACH processor for card-like disputes). In those cases:

• Follow the bank’s or issuer’s guidance on where to file first.
• Keep all documentation and ask for written confirmation of the opened dispute.

Escalation options and consumer protections

• CFPB: File a complaint if your bank or card issuer mishandles a dispute (https://www.consumerfinance.gov/). The CFPB can mediate and drive responses.
• State consumer protection agencies: Especially helpful for merchant-side complaints or persistent local-business problems.
• Card network arbitration: In some high-value or unresolved merchant cases, the card networks provide arbitration pathways between issuers and merchants.

Useful internal resources

• For step-by-step guidance on reporting unauthorized charges, see our guide: How to Dispute Unauthorized Charges: Step-by-Step.
• If your bank isn’t responding, learn how to escalate the issue: How to Escalate a Billing Dispute with Your Bank.

Final professional tips

• Act quickly. Start documentation the moment you notice a problem.
• Use written communications (email/screenshots) when you contact the merchant.
• If identity theft is suspected, place fraud alerts, consider a credit freeze, and file a police report.
• Keep a dispute folder (digital or physical) with all evidence and dates—this is invaluable if you need to escalate.

Disclaimer

This article is educational and reflects best practices as of 2025. It is not legal or financial advice for your specific situation. For personalized guidance, contact your card issuer, bank, or a licensed financial professional.

Authoritative sources

• Consumer Financial Protection Bureau (CFPB) — Disputes and error resolution: https://www.consumerfinance.gov/
• Federal Trade Commission (FTC) — Credit and debit card protection guidance: https://www.consumer.ftc.gov/
• CFPB and card-network rules summaries for chargebacks (Visa, Mastercard) — consult your issuer’s dispute policy for precise deadlines and reason codes.