How to Get Your Money Back if a Business Goes Under…and Take Your Cash With Them
Monarch, Rayani, Low Cost Holidays…these three big names vanished from the travel industry since late 2016. Thousands of travelers have been left stranded in each case, while thousands more find their pre-booked travel plans stuck in limbo.
The Situation on the Ground
Trustees assigned to manage the companies’ assets, as well as regulators and other experts, have advised customers to follow certain protocol to recover their funds.
For example, the UK’s Civil Aviation Authority provides insurance to travelers who book with a business holding a valid Air Travel Organizer’s License, or ATOL. If the business does not have this license, though, the CAA advises travelers to file a chargeback instead. Customers have similarly been advised to file chargebacks in the case of the other two companies as well to recover their money.
This is a fair and acceptable usage of the chargeback as a consumer protection mechanism. However, you might be confused about when it’s acceptable to file a chargeback…and what may be the consequences.
Chargebacks were created to help consumers protect themselves against fraud or other loss when conducting a credit or debit transaction. In the case of a business suddenly going bust like the travel companies mentioned above, a chargeback will let consumers reverse the sale to recover funds for services that were not provided.
Of course, chargebacks are acceptable when specifically instructed to do so by the business in question or another authority. However, chargebacks should only be an option under specific circumstances.
Filing a chargeback without proper justification—a practice referred to as “friendly fraud”—is akin to stealing. This can lead to serious consequences; if your bank discovers that you requested an unjustified chargeback, they might cancel your account. This will interrupt your day-to-day life, as well as impact your credit score and may even make it harder to get an account with another bank in the future.
Follow the Steps
If you’re not covered by some form of consumer insurance like the ATOL, it will be up to you to recover your funds. However, you need to make sure you’ve exhausted all other options before filing a chargeback to make sure you don’t accidentally commit friendly fraud.
There is a general step-by-step process for customer service interactions, and unless you’ve been specifically directed to file a chargeback, do not do so without first trying the following options:
- Designated Customer Service Channels: Your first course of action should be to check the business’s website for contact information. Most will have a specified point of contact listed for customer service via phone and email. Some will offer service via instant messaging as well.
- Alternative Service Channels: If you can’t reach anyone via the merchant’s specified service information, you can try other options like social media. Try messaging the business on Facebook, Twitter, or any other social media platform you can find.
- Third-Party Support: If you’re unable to get any response from the business at all, it’s time to seek outside help. We at eConsumer Service are the payment industry leaders in recovering funds for customers. Click here to learn more about our services.
- Chargeback: Proceed to this step only when all other options are exhausted. Remember, though: a chargeback carries no guarantee of success. If the bank finds that the seller’s case is stronger, you will lose the dispute and may face additional consequences.
With Great Power…
No matter whether it’s airline tickets, electronics, apparel, or any other product, a chargeback should not be your first option. Remember that you still have options—as well as responsibilities—even if a business goes bust.