A number of banks have failed to act on recommendations for good industry practice in handling chargeback requests and will be asked to work with the Code Compliance Monitoring Committee to raise their standards.
The CCMC, which monitors banks' compliance with the Code of Banking Practice, reviewed chargeback procedures in 2011 and, in a
report published early last year, it said banks needed to do a better job of communicating with their customers when dealing with a chargeback.
Under chargeback rules, a consumer can apply to have a card transaction reversed if the transaction has been duplicated, it was unauthorised or fraudulent, or the purchased goods were not received. The chargeback rules are part of the Code of Banking Practice.
The CCMC found there were only a small number of complaints about banks' handling of chargeback requests. It also found there was a good level of compliance.
However, there were inconsistencies between banks and within banks regarding the documentation required to process a chargeback.
Cardholders were often given open-ended timeframes for processing their applications, without being told that their right to a chargeback may be lost if a referral is not made within a specific time. Advice on timeframes was, at times, inconsistent with the advice given in the credit card terms and conditions.
The CCMC said banks needed to be clearer about timeframes and should also make sure reasons for refusal were understood.
It suggested that banks include a statement on chargebacks in monthly account statements.
It said: "Further work is required by banks to raise the level of accuracy of the information provided to customers by contact centres in this area."
In a bulletin published this month, the CCMC said it conducted a follow-up mystery shopping exercise and found there had been little improvement when compared to the findings of its 2011 review.
It said it planned to work with a number of banks, providing feedback on areas of concern and making individual recommendations for improvement.