Travel agencies have been urged to set up systems to ensure credit card chargebacks from customers awaiting refunds are challenged.

Customers have been increasingly turning to their card providers when told their refund may take longer than the 14 days the Package Travel Regulations dictate because of the huge numbers as a result of the coronavirus crisis.

But chargebacks are often being made to travel agencies which are not in possession of the money, which they are awaiting from suppliers – be them tour operators, airlines or hotels.

Speaking in a special Travel Weeklyadvice webcast, Travlaw associate solicitor Krystene Bousfield said chargebacks have “always been present in the industry” but that firms are seeing them “more than ever” in the current crisis with many firms delaying refunds.

Advice:What you need to know about chargebacks

She said “the most frustrating thing” about chargebacks is that “they’re quite easy to do” by the customer and that “the bank will usually automatically, or with a little push back” take that money back without looking in detail at the legal issues.

Bousfield said the “good thing” is that card providers such as MasterCard and Visa are aware of the heightened number of chargebacks because of Covid-19 and have given out specific guidance and advice to help disputes.

Advising how to dispute chargebacks, Bousfield said: “Be open, be punctual, be succinct and evidence your arguments. She added: “Of course, you want to try to avoid chargebacks in the first place. You want to speak with your customers, you want to give them options. You want to empathise with their position, but you want to try and keep that line of communication open to start and stop them from just automatically going to their bank in the first place.”

“That being said, you need to be aware of these chargeback requests as and when they arise; you need to have a system in place internally because if you receive a chargeback request and you do not dispute it, it will automatically be approved and be granted. So you need to have people on hand to be actioning these, to be reviewing them and disputing them as and when they come in. There are deadlines and timelines [of between seven and 30 days] for doing that, so you really want to be on top of that.”

She added that it was important to check the validity of the chargeback and noted an “unfortunate” few examples where customers have taken their holiday and are using a chargeback to “push their luck” or when a customer chose not to travel when the holiday was able to go ahead.

“That’s not a valid chargeback,” Bousfield said, adding that when disputing and responding to chargeback requests you should be “short, sharp and to the point”. “There is no point in responding to Barclaycard, or whoever it may be, with a four page letter setting out technical legal arguments or quoting four pages of your terms and conditions. They’re not going to read it all.”

She said it was important to provide evidence to back up any disputes and advised that it is worth raising if customers have not approached you for a resolution before opting for a chargeback.

“We’ve had a lot of clients who with our help have been successfully disputing chargebacks,” Bousfield added, saying it amounted to “hundreds of thousands of pounds”. She noted: “It’s not that we’re trying to keep money from customers, we’re not. But it’s not a case of the banks granting them without knowing the full circumstances.”

She also urged companies who are not having success challenging chargebacks to ask the merchant provider for more information on why. “As an industry, we still need to keep disputing these as best as we can.”