Credit Card Fraud – Chargeback Explained and How to Recover Your Money

Credit card fraud remains one of the most prevalent forms of financial crime in Europe. The growth of online payments and e-commerce has led to a corresponding increase in unauthorised transactions, phishing schemes, fake online stores, and fraudulent payment processing. Victims searching for guidance on reporting credit card fraud and credit card scam chargeback procedures represent only a fraction of those affected. However, unlike many other forms of fraud – particularly cryptocurrency transfers, which are technically irreversible – card transactions are subject to regulation and can be disputed. The chargeback procedure, combined with the protections provided by PSD2 and the Visa/Mastercard dispute resolution frameworks, offers a direct path to fund recovery. In the majority of cases, the outcome depends on three factors: the speed of the victim’s response, the correct use of the chargeback procedure, and – where the bank fails to act – the application of regulatory and legal mechanisms to enforce the victim’s rights.

What Is Credit Card Fraud

Credit card fraud encompasses any unauthorised or fraudulent use of a payment card or card data to obtain funds or goods. This includes unauthorised transactions made without the cardholder’s knowledge or consent, the use of stolen or compromised card data for online purchases, fraudulent online payments through fake e-commerce websites, phishing schemes designed to capture card details, and recurring charges or subscriptions initiated without the cardholder’s authorisation. Unlike bank wire transfers, where the sender initiates the payment directly, card transactions pass through a regulated network of issuing banks, acquiring banks, and payment schemes (Visa, Mastercard) – each of which has obligations to the cardholder and dispute resolution procedures that can be invoked when fraud occurs. This regulatory infrastructure is what makes card fraud one of the most recoverable forms of financial crime.

How Credit Card Fraud Schemes Work

Credit card fraud operates through several common scenarios. The most prevalent is the entry of card details on a fraudulent website – the victim is directed to a fake e-commerce store, a phishing page impersonating a legitimate service, or a counterfeit payment portal, and enters card details that are then used for unauthorised transactions. The second scenario involves phishing – the victim receives an email, SMS, or social media message containing a link to a fake website that captures card credentials. The third is non-delivery fraud – the victim pays for goods or services through a legitimate-looking website, but the product is never delivered and the seller becomes uncontactable. The fourth is unauthorised recurring charges – the victim’s card is enrolled in a subscription or recurring payment without explicit consent, often through misleading terms hidden in the checkout process. The fifth is card-not-present fraud – stolen card data, obtained through data breaches, skimming devices, or social engineering, is used for online transactions without the cardholder’s knowledge. In each of these scenarios, the card data or the transaction itself is processed through the Visa/Mastercard network, which means the transaction can be disputed through the chargeback mechanism.

What Is Chargeback

Chargeback is the procedure through which a cardholder’s bank (the issuing bank) reverses a transaction and returns the funds to the cardholder in cases of fraud, non-delivery of goods or services, or other qualifying disputes. The chargeback mechanism is built into the Visa and Mastercard payment networks and is governed by the rules of the respective card scheme. Chargeback applies in cases of unauthorised transactions – where a payment was made without the cardholder’s knowledge or consent, non-delivery – where goods or services were paid for but never received, fraudulent misrepresentation – where the product or service delivered was materially different from what was advertised, and duplicate or incorrect charges. Chargeback is one of the most effective consumer protection mechanisms available for card transactions. It shifts the burden of proof to the merchant – the merchant must demonstrate that the transaction was legitimate, rather than the cardholder having to prove it was not. The chargeback window is typically 120 days from the date of the transaction, though this may vary depending on the card scheme and the reason for the dispute.

What to Do Immediately When Credit Card Fraud Is Discovered

The first actions after discovering credit card fraud are critical. The immediate priority is to block the card – contact the bank and request that the compromised card be blocked or cancelled to prevent further unauthorised transactions. The second priority is to notify the bank’s fraud department – report the fraudulent transactions, provide details of the disputed charges, and request the initiation of the chargeback procedure. The third priority is to secure all available evidence – bank statements showing the fraudulent transactions, screenshots of the fraudulent website or online store, email correspondence and order confirmations, any communication with the seller or platform, and records of any products received or not received. This evidence forms the basis of the chargeback claim and any subsequent legal action. The fourth priority is to file a formal dispute with the bank – a written statement identifying the fraudulent transactions, the grounds for the dispute (unauthorised payment, non-delivery, fraudulent misrepresentation), and the supporting evidence. The timeliness of these actions directly affects the outcome – the sooner the bank is notified and the chargeback initiated, the higher the probability of a successful reversal.

How the Chargeback Procedure Works

The chargeback process follows a structured sequence. The first stage is the cardholder’s claim – the victim files a dispute with the issuing bank, identifying the fraudulent transaction and providing evidence. The second stage is the issuing bank’s review – the bank analyses the transaction, verifies the claim, and, if the grounds are sufficient, initiates a chargeback request through the card network (Visa or Mastercard). The third stage is the acquirer notification – the card network forwards the chargeback to the merchant’s bank (the acquiring bank), which in turn notifies the merchant. The fourth stage is the merchant’s response – the merchant may accept the chargeback or contest it by providing evidence that the transaction was legitimate (a process known as representment). The fifth stage is the decision – if the merchant does not respond or the evidence supports the cardholder’s claim, the funds are returned. If the merchant contests the chargeback, the card network may arbitrate the dispute. The entire process typically takes from several weeks to several months, depending on the complexity of the case and whether the merchant contests the reversal. Throughout the process, the quality of the evidence provided by the cardholder – transaction records, correspondence, screenshots, delivery records – is the primary factor determining the outcome.

When Chargeback Is Available

Chargeback is available in a range of scenarios. For unauthorised transactions – where the card was used without the cardholder’s knowledge or consent, including cases of stolen card data, phishing, and card-not-present fraud. For non-delivery of goods or services – where the victim paid for a product or service that was never provided. For fraudulent online stores – where the victim entered card details on a fake e-commerce website. For recurring charges without consent – where the card was enrolled in a subscription without explicit authorisation. For material misrepresentation – where the product or service delivered was substantially different from what was advertised. The probability of a successful chargeback is highest when the victim acts quickly, provides comprehensive evidence, and the claim falls clearly within the card network’s dispute categories.

Limitations of the Chargeback Procedure

Despite its effectiveness, the chargeback procedure has limitations that victims should understand. The first is the filing deadline – chargeback claims must typically be filed within 120 days of the transaction date, and in some cases the window may be shorter depending on the card scheme and the type of dispute. Missing this deadline may eliminate the chargeback option entirely. The second is the evidence requirement – the issuing bank requires documentary evidence supporting the claim, and claims without adequate evidence are more likely to be rejected. The third is the possibility of bank refusal – the issuing bank may decline to initiate a chargeback if it determines that the grounds are insufficient or that the transaction was authorised. The fourth is merchant contestation – the merchant may contest the chargeback through the representment process, which can delay the resolution and, in some cases, result in the chargeback being reversed. The fifth is cross-border complexity – where the merchant, the acquiring bank, and intermediary payment processors are located in different countries, the chargeback process may be more complex and take longer to resolve. In cases where the standard chargeback procedure is insufficient – where the bank refuses the chargeback, the merchant contests it successfully, or the complexity of the case exceeds the scope of the card network’s dispute resolution – additional legal mechanisms become necessary.

PSD2 and the Bank’s Obligations

The EU Payment Services Directive (PSD2) provides strong protections for cardholders that go beyond the standard chargeback procedure. Under PSD2, banks are required to refund unauthorised transactions within one business day of being notified, unless there are reasonable grounds to suspect fraud by the cardholder. Banks must apply Strong Customer Authentication (SCA) – a two-factor authentication process – for electronic payments, and failure to apply SCA shifts the liability for unauthorised transactions to the bank. Where the bank fails to meet its obligations under PSD2 – by refusing to refund an unauthorised transaction, failing to apply Strong Customer Authentication, delaying the processing of a chargeback, or ignoring fraud notifications from the cardholder – the bank’s failure itself becomes grounds for a regulatory complaint and a subsequent civil claim against the bank. PSD2 creates an independent recovery path that does not depend on the identification of the fraudster – it operates against the financial institution that failed in its regulatory obligations.

Reporting Credit Card Fraud

Effective reporting strengthens the victim’s position in the chargeback process and opens additional recovery paths. The fraud should be reported to the bank – the chargeback procedure is initiated through the issuing bank, and the fraud report creates a formal record that supports the claim. A criminal complaint should be filed with the relevant law enforcement authority – the police, the public prosecutor’s office, or a specialised cybercrime unit. The criminal complaint initiates an investigation that can identify the fraudster, trace the movement of funds, and lead to asset seizure. In cross-border cases, law enforcement coordination is conducted through Europol, Eurojust, and mutual legal assistance mechanisms. The fraud should also be reported to the relevant payment scheme – Visa and Mastercard have their own fraud reporting channels. Finally, complaints to national financial regulators – the FCA (United Kingdom), BaFin (Germany), AMF (France), CNMV (Spain), CONSOB (Italy), AFM (Netherlands), ACPR (France), Banca d’Italia – initiate supervisory reviews of the bank’s actions. Where the bank breached its obligations under PSD2 or failed to process the chargeback correctly, the regulatory complaint creates pressure on the bank and grounds for subsequent legal action.

Legal Mechanisms Beyond Chargeback

Civil Proceedings

Where the chargeback procedure is exhausted or insufficient, civil litigation provides an alternative path to fund recovery. Civil proceedings can be brought against the fraudster, the merchant, intermediary payment processors, or – where the bank failed in its obligations – against the bank itself. Proceedings are filed in the jurisdiction of the defendant’s domicile, the location of the assets, or the place where the damage occurred. Grounds include fraudulent misrepresentation, unjust enrichment, breach of contract, and breach of regulatory obligations. Civil proceedings can achieve recovery of the full amount of the loss, compensatory damages, and enforcement through EU mechanisms.

Interim Measures – Freezing Orders and EAPO

Freezing orders and the European Account Preservation Order (EAPO, Regulation (EU) No. 655/2014) are critical tools for preventing asset dissipation in cases where the chargeback alone is insufficient. The EAPO enables the freezing of a fraudster’s bank accounts across all EU member states simultaneously on an ex parte basis – without prior notice to the defendant. In credit card fraud cases involving organised schemes with substantial amounts, the EAPO may be necessary to preserve assets pending civil proceedings.

Criminal Proceedings and Asset Seizure

Criminal proceedings, in addition to their investigative function, can lead to the seizure and confiscation of the fraudster’s assets. Law enforcement authorities have powers to freeze bank accounts, seize property, and confiscate proceeds of crime. In cross-border credit card fraud cases, these powers are exercised through international cooperation mechanisms. Criminal proceedings provide an independent path to asset recovery that complements both the chargeback procedure and civil litigation.

Regulatory Complaints

Complaints to financial regulators against banks and payment institutions that failed in their obligations create supervisory pressure and grounds for claims. Where the bank refused a legitimate chargeback, failed to apply Strong Customer Authentication, or failed to refund an unauthorised transaction within the timeframe required by PSD2, the regulatory complaint creates an independent basis for a civil claim against the bank.

Asset Tracing

In cases involving organised credit card fraud schemes, asset tracing – the process of identifying and locating the fraudster’s assets – provides the basis for interim measures and civil proceedings. Asset tracing covers bank accounts across multiple jurisdictions, corporate structures, and other assets held by the individuals and entities behind the scheme.

Cross-Border Aspects of Credit Card Fraud

Many credit card fraud cases involve international transactions. The fraudulent merchant is located in one country, the acquiring bank that processed the payment is in another, intermediary payment processors are in a third, and the victim’s issuing bank is in a fourth. This cross-border structure can complicate the chargeback process – the acquiring bank may be slow to respond, the merchant may be unreachable, and the fund flow may involve multiple intermediaries. In cases where the standard chargeback procedure encounters cross-border obstacles, legal action in the relevant jurisdictions becomes necessary. Civil proceedings, criminal complaints, and regulatory referrals may need to be initiated in the country where the merchant is located, the country where the acquiring bank operates, and the country where the funds were ultimately received. The parallel application of these mechanisms across jurisdictions significantly increases the probability of recovery compared to reliance on the chargeback procedure alone.

Common Mistakes Victims Make

Victims of credit card fraud frequently make mistakes that reduce the probability of fund recovery. The most common is late notification of the bank – every day of delay reduces the effectiveness of the chargeback procedure and may cause the 120-day filing window to be missed. The second is failure to secure evidence – not preserving screenshots of the fraudulent website, not retaining email correspondence, or not documenting the disputed transactions before the fraudulent site disappears. The third is attempting to negotiate with the fraudster – which provides additional time for asset dissipation and often leads to further losses. The fourth is making additional payments – fraudsters frequently demand further transfers under the guise of delivery fees, refund processing charges, or account verification, each of which is a continuation of the fraud. The fifth is ignoring suspicious transactions – small or unfamiliar charges on a card statement may indicate that the card data has been compromised and that larger fraudulent transactions will follow. Each of these mistakes narrows the window for recovery and reduces the effectiveness of the chargeback procedure and subsequent legal action.

Can the Money Be Fully Recovered?

The outcome of a credit card fraud case depends on the specific circumstances. Full recovery of the funds is possible – and is the most common outcome – where the chargeback is initiated promptly, the evidence is clear, and the bank processes the claim correctly. Partial recovery may occur where some transactions are successfully reversed but others fall outside the chargeback window or are contested by the merchant. In cases where the bank refuses the chargeback, recovery may still be achieved through regulatory complaints, civil proceedings, or claims against the bank for PSD2 breaches. The key variables are the speed of the victim’s response, the quality of the evidence, and – in complex cases – the application of legal mechanisms beyond the standard chargeback procedure.

How Long Does Recovery Take?

Timelines depend on the mechanism used and the complexity of the case. The bank’s initial response to a fraud notification is typically within several days. The chargeback review and processing takes from several weeks to several months, depending on whether the merchant contests the claim. Interim measures (EAPO, freezing orders) can be obtained within days. Civil proceedings typically take several months. Cross-border cases involving multiple jurisdictions take longer. In all cases, the earlier the procedures are initiated, the faster the result – and the higher the probability of full recovery.

The Veritas Advisory Group Approach

Veritas Advisory Group is structured as a specialised entity focused exclusively on the recovery of funds lost to fraud. The firm brings together over 50 in-house and external lawyers across EU countries, Switzerland, and the United Kingdom. Over 7 years of experience handling fraud cases and over 100 successful fund recovery cases. The key elements of the approach are: exclusive specialisation in fraud and asset recovery, a distributed team across multiple jurisdictions, the ability to launch chargeback procedures, regulatory complaints, civil proceedings, and criminal complaints simultaneously in multiple jurisdictions on the day the client makes contact, combination of civil, criminal, and regulatory instruments, and case management from the initial assessment through to enforcement and actual fund recovery.

Case Methodology

Every case is handled through a structured model. The first stage is the initial analysis and assessment of prospects – the client receives a realistic evaluation of their legal position, available mechanisms, and timelines. The second stage is the collection and analysis of evidence and transactions – documenting the payment chain, identifying the merchant, the acquiring bank, and intermediary structures. The third stage is the development of the legal strategy – determining whether the chargeback procedure is sufficient or whether additional mechanisms (regulatory complaints, civil proceedings, criminal complaints) are required. The fourth stage is the parallel initiation of procedures – chargeback, criminal complaint, regulatory referral, civil proceedings, and interim measures are launched simultaneously where necessary. The fifth stage is representation of the client’s interests through to enforcement and actual fund recovery.

Free Initial Case Assessment

Veritas Advisory Group provides a free initial assessment that enables the client to understand their legal position, evaluate the prospects for fund recovery through chargeback and other mechanisms, identify the available legal paths, and receive a realistic estimate of timelines and probability of success. This allows the client to make an informed decision about commencing proceedings without financial commitment at the assessment stage.