One very distressing element of the debit card experience can be an unauthorised debit card transaction.  This is when a fraudulent transaction has been made on a card which was not authorised by the debit card holder.  It can, however, be possible to get such debit card transactions reversed.

The rate of card fraud seems to be increasing at an alarming rate. The Australian Payments Network recently reported that in the 12 months to 30 June 2022, fraud on payment cards increased 1.9%, to a total of $499.5 million. This is a staggering 9.2% increase between FY20 and FY21.

The first thing to be clear about is that, if a debit card transaction was made that was simply regretted later, the process about getting the transactions reversed can be different to the process for getting an unauthorised transaction changed.  If a person simply made a poor transaction, which he or she later regretted, it still qualifies as a legal transaction, and can be a very common experience.

How to get a refund

In many cases there will be refund rights that the vendor will extend to the customer, which should be checked in the literature or upon the company website.  There may also be a compensation policy for poor performance.  Even if a person does not have any rights to a refund they may find, if they approach the shop or service provider, that they will get some compensation, as a gesture of goodwill.

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It is a different procedure, however, if the account has experienced an unauthorised transaction.  This usually happens when a card is stolen, or the card details are used without the card holder knowing.  In such cases the person will have a strong right to get their money back, although there will be some forms that need to be completed.

Steps to disputing a debit card transaction

The first step, when there has been an unauthorised transaction, is to approach the shop.  This can be less bureaucratic and many shops are quite keen to be able to avoid difficulties with card providers or even state regulators. Sometimes, a simple phone call or email can resolve the issue quickly and easily. Follow up your phone call with an email summarising the call. You should have some proof that this was an unauthorised transaction, such as the goods going to a new and different address, or if there is a shop transaction, then some evidence that the card holder was away from the shop. Keep a record of any communication you have with the merchant.

If there is no satisfaction at this stage, it is a good idea to consider going to the card issuer’s zero liability guarantee.  If the unauthorised transaction has been reported in a timely manner, the money should eventually be refunded, although this will not be immediate. They will investigate the matter and may be able to reverse the transaction or block further charges. You will need to provide evidence of your dispute, such as receipts, invoices, statements and correspondence.

If you’re still waiting for a refund on your unauthorised transaction, follow up with your bank up and escalate if needed. Depending on the nature and amount of the transaction, the dispute process may take some time and involve multiple parties. You should keep track of the progress and follow up with your bank or card issuer regularly. If you are not satisfied with the outcome, you may be able to escalate your complaint to an external dispute resolution scheme, such as the Australian Financial Complaints Authority (AFCA).

Unauthorised transactions on debit cards are a serious issue that can affect many Australians