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MoneyCredit cardsSome banks say they've never heard of Chargeback: don't listen to themWhy were two Halifax customers told they couldn't use Visa's debit card refund scheme? Lisa Bachelor reports

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Lisa Bachelor The Observer, Sunday 9 November 2008 Article historyHalifax current account customers have been struggling to get refunds they are entitled to because the bank's staff have not heard of a scheme called Visa Chargeback.

Chargeback, as we explained in Cash last week, allows people who have made a purchase by Visa debit card to claim back the cost of goods and services that are not delivered. It gives similar protection to that granted for credit card purchases, but is not as well recognised. Hundreds of passengers of collapsed airlines Zoom and XL who paid by Visa debit card have successfully been using Chargeback in the last few weeks to reclaim the cost of flights that they were unable to take because the companies went bust.

To make a claim using Chargeback, customers must contact their card issuer, which then contacts the company's payment-processing bank to reclaim the money. This means that even if a company goes into liquidation it is possible to reclaim money, as the claim is made against a bank, not the company itself. The claim can be made on any purchase where the goods or services are not provided, and is not dependent on the supplier going bust.

But two Halifax customers have contacted The Observer to say they had their claims turned down by the bank because its call centre staff claimed not to have heard of the scheme. 'I have attempted on three separate occasions to initiate a Visa Chargeback procedure with the Halifax for a £400 flight that I booked with Zoom,' says Roy Shearer, a design engineer from Glasgow. 'The bank, however, has continually failed to acknowledge that the scheme exists, both via telephone banking and at two different branches that I visited. It logged the details of my request, as with a credit card refund, but told me that there was very little chance I could get a refund and if so that it would take six months.'

He continues: 'I have made a complaint to the bank but have received no response. I am tired of the whole affair and don't know what else I can do until Halifax are willing to acknowledge that the scheme exists.'

Another Halifax customer, Stephen McGonagle from Belfast, booked £450 Zoom flights using his Halifax Visa debit card. But when he approached the bank to make a claim using Chargeback he says the staff were unhelpful and told him there was nothing he could do. He persisted and was in the end told he had to complete a 'non-fraudulent claim form'.

'Halifax informed me that the process is that the money is refunded to your account, then Visa have 45 days to investigate and may even take the money back off me,' he says. Recently he contacted the bank again and staff told him he would be notified approximately a week before if any money was to be taken off him by Visa, but no notification would be given if he was allowed to keep the money.

'I initiated the process on 29 August 2008 and the money was refunded into the account around 5 September, but knowing that this money may be taken from me at any stage makes it untouchable at present. A difficult situation to be in coming up to Christmas,' he says.

Halifax has admitted its mistake in the case of Mr Shearer and is writing to him to apologise. It is also writing to Mr McGonagle to inform him the money will not be taken from his account.

Explaining the Chargeback process, a Halifax spokeswoman confirmed that the bank does require customers to fill in a claim form, as Mr McGonagle did, and then that customer will instantly be credited for the amount he or she has lost. Halifax will then contact Zoom's payment-processing bank to see if it can reclaim the money from that bank. Zoom's bank has 45 days to respond. What Halifax didn't make clear to Mr McGonagle is that he would have got his money back in any case: either it would have been refunded by Zoom's bank (in which case Halifax would take its contribution back) or Halifax would have left the money with Mr McGonagle. 'This is a learning point for us and we will work with front-line staff to make sure they are aware of the process,' says the spokeswoman.

These are not the only customers who have had their Chargeback claims rejected by banks. Internet forums are littered with stories of people who have had similar experiences, mainly because bank staff are not familiar with the term 'Chargeback' and, in many cases, the process itself.

'The word "Chargeback" is sometimes not recognised because the process has only recently begun to be used widely by consumers,' says a spokesperson for Visa. 'If someone does have an issue with call centre or branch staff, they should persevere with their claim by asking to speak to a supervisor.' Or you could take this article with you to one of your bank's branches and point out the error of its ways

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